1-

^ ~1

THE LIBRARY

OF

THE UNIVERSITY

OF CALIFORNIA

LOS ANGELES

A LIVING WAGE

f^y^'

A Living Wage

ITS ETHICAL AND
ECONOMIC ASPECTS

BY

JOHN A. RYAN, S. T. D.

PROFESSOR OF ETHIC3 AND ECOROMICS
IN THE ST. PAUL SEMINARY

WITH AN INTRODUCTION BY

RICHARD T. ELY, Ph. D., LL. D.

THE MACMILLAN COMPANY

LONDON : MACMILLAN & CO.. LTD.
I912

^// rithti rtstrvid

Copyright, 1906,
By the MACMILLAN COMPANY.

Set up and electrotyped. Published April, 1906. Reprinted
April, 1908 ; October, 1910 ; March, 1912.

/?/2.

TO

RICHARD T. ELY, Ph. D., LL. D.

Through whose Writings the Author

first became interested in the

Study of Economic

Problems

%\i\i 15oo& ti9 DeHicateD

AUTHOR'S PREFACE

This work does not profess to present a complete
theory of justice concerning wages. It lays down
no minute rules to determine the full measure of
compensation that any class of laborers ought to re-
ceive. The principles of ethics have not yet been
applied to the conditions of modern industry with
sufficient intelligence, or confidence, or thoroughness,
to provide a safe basis for such an undertaking. The
conclusions to which it would lead would be either
too general to be of any practical value, or too uncer-
tain to yield more than a misleading approximation
to ethical truth. At any rate, the doctrine advanced
would probably fail to convince any considerable sec-
tion of those to whom it was addressed. The great
majority of fair-minded persons believe, indeed, that
labor does not get its full share of the wealth that it
helps to create, but they are not agreed as to the
precise measure of that ideal share.

Upon one principle of partial justice unprejudiced
men are, however, in substantial agreement. They
hold that wages should be sufficiently high to enable
the laborer to live in a manner consistent with the
dignity of a human being. To defend this general
conviction by setting forth the basis of industrial, re-
ligious and moral fact upon which it rests, is the aim
of the present volume. Several considerations have
vil

A LIVING WAGE

led the author to think that this task is well worth
while. In the first place, the Living Wage doctrine
points the way to a very considerable amelioration of
the condition of millions of American workingmen ;
in the second place, a Living Wage would enable
those raised to its level to improve their position
still further; and, in the third place, this volume
shows that religion, as represented by the oldest and
largest of the Christian denominations, professes,
nay, urges, a definite and considerable measure of
industrial justice.

While insisting that every laborer has a right to at
least a Living Wage, the author does not commit
himself to the view that this quantity of remuneration
is full and adequate justice in the case of any class of
laborers. His concern is solely with the ethical min-
imum.

The permission of the Editors of the Catholic
University Bulletin and the Catholic World to re-
produce those portions of the work that have al-
ready appeared in their publications, is gratefully
acknowledged. In the same spirit the author wishes
to record his indebtedness to the professors of the
Catholic University of America under whose direc-
tion the first draft of the work was written, namely,
Dr. Bouquillon, who has since gone to his reward
eternal, and Dr. Neill, who is at present the efficient
Chief of the United States Bureau of Labor ; and to
Dr. Ely of the University of Wisconsin, who read
the work in manuscript and wrote the Introduction,
and whose advice, assistance, and eftcouragement
have been frequent and invaluable. If the author
viii.

AUTHOR'S PREFACE

were to single out for especial acknowledgfment any
of the writers whose works have aided him in the
preparation of his own, he would mention the names
of Sidney and Beatrice Webb and of John A. Hob-
son; for these seem to him to have analysed and
treated the principal industrial facts with which he
has had to deal in a more adequate and vital way than
any other writers with whom he is acquainted.

John A. Ryan.
St. Paul, Minn.
March, ipo6

ix

INTRODUCTION

I am glad to have an opportunity to point out
briefly the significance of Professor Ryan's book,
as it impresses itself on my mind. We have had
repeated efforts to stimulate the conscience of the
Christian world to a keener appreciation of its duties
to the men, women and children who toil for wages.
Christian socialism, so-called, has been presented
frequently by men of various religious denomina-
tions. A greater sensitiveness to right and wrong
in economic affairs has undoubtedly been the result
of this preaching of righteousness. Enlightenment
has, however, not kept pace with good intention. On
the contrary, nothing is more noticeable than the
confusion of mind which very generally accompanies
good intention. The "plain man" of whom we hear
so much, has a feeling that our teachers and preach-
ers are vague and indefinite. Is there after all such
a thing as a Christian doctrine of wages ? The writer
of this book, a priest in the Roman Catholic Church
and a teacher in St. Paul Seminary, a theological
school of that Church, presents to us in the following
pages, a clear-cut, well-defined theory of wages,
based upon his understanding of the approved doc-
trines of his religious body. There have been at-
tempts in other lands to deduce from the teachings of
this Church, clear and precise directions for our in-

A LIVING WAGE

dustrial life. We recall the works of Bishop von Ket-
teler of Mainz and the more conservative writings of
Professor Charles Perin of the University of Lou-
vain in Belgium. While Cardinal Manning of Eng-
land some years ago startled the English-speaking
world by his enunciation of the right of man to a
subsistence as prior to the rights of property as a
doctrine of the Church, and while Cardinal Gibbons
in the United States has on several occasions ex-
pressed himself firmly and positively in regard to the
rights of labor, the present work is, so far as I am
aware, the first attempt in the English language to
elaborate what may be called a Roman Catholic sys-
tem of political economy. When I say, a Roman
Catholic system of political economy, I mean an at-
tempt to show exactly what the received doctrines of
the Church signify in the mind of a representative
Catholic when they are applied to the economic life.
It strikes me as a meritorious performance at the
present juncture to endeavor to express as precisely
as may be what Christianity has to say about wages.
While members of other religious bodies. Chris-
tian and Jewish, cannot receive the doctrine of wages
here set forth merely because it is assumed to rest
on the approved teachings of the Roman Catholic
Church, they are not precluded from an examination
of this question: Does or does not this doctrine of
wages rest upon broad Christian, religious and ethic-
al foundations? It will be observed that Professor
Ryan combines economic and ethical arguments with
those derived from authority and that it is by no
means impossible to receive arguments of the first

INTRODUCTION

class, while refusing adhesion to those of the second
class. My own feeling then is that this book is to be
welcomed as an attempt on the part of a religious
teacher to get beyond vague and glittering general-
ities to precise doctrine, and to pass from appeals to
sentiment to reasoned arguments.

While I have ventured in these few words to show
what in my opinion is the significance of the present
work, it is manifestly altogether beyond my province
now and here to express any views of my own in re-
gard to the correctness of its conclusions.

Richard T. Ely.
University of Wisconsin
February, ipo6

CONTENTS

Page
Preface vii

Introduction xi

SECTION I

Introductory and Historical

Chapter

I Economic and Legal Presumptions Against

a Living Wage 3

II Some Authorities in Favor of an Ethical

Standard for Fixing Wages 23

SECTION II

The BasiSj Nature, and Content of the
Right to a Living Wage

III The Basis and Justification of Rights 43

IV The Right to Subsistence and the Right to

a Decent Livelihood d"]

V The Right to a Personal Living Wage 81

VI The Right to a Family Living Wage no

VII A Concrete Estimate of a Living Wage 123

SECTION III

Economic Facts by Which the Right is
Conditioned

VIII The Underpaid Laborers of America: their

Number and Prospects 153

CONTENTS

IX

Our Industrial Resources and

a Living

Wage for All

178

X

The Forces that Regulate Price

190

XI

Rent

199

XII

Profits

207

XIII

Interest

211

XIV

Wages

SECTION IV

222

The Obligations Corresponding to the
Right

XV The Obligation of the Employer 237

XVI The Obligation of the Loan-Capitalist, the

Landowner, the Consumer, and the Man

of Wealth 262

XVII The Obligation of the Laborer 280

XVIII The Obligation of the State 297

XIX Summary and Conclusion 324

Works of Reference 333

Index 341

SECTION I

INTRODUCTORY AND
HISTORICAL

CHAPTER I

Economic and Legal Presumptions Against a
Living Wage

Wages at present determined by the unlimited use of bar-
gaining power. Attitude of the bargainers toward the
moral aspects of the wage-contract. The theory of a wage-
fund. The supposed effect of economic laws. Nature of
an economic law, and sense in which it determines the rate
of wages. Teaching of the classical economists, and pre-
sumptions underlying it. Adam Smith's belief in individual
liberty and enlightened self-interest shared by all his follow-
ers. These assumptions discredited by the facts of English
industrial history, and rejected by present day economists.
Modern legislation recognizes the method of unlimited bar-
gaining. Causes of this attitude. Economic and legal pre-
sumptions against a moral standard of wages are invalid
because their basis is unsound.

I. The Present Method of Fixing Wages.— The
doctrine that every laborer has a moral right to a
Living Wage is obviously in direct conflict with
existing business practice and theory. In the great
majority of wage-contracts, a decent livelihood for
the worker is not among the aims that are conscious-
ly and earnestly sought by both parties. Sometimes
it is not explicitly thought of by either of them.
The amount of remuneration, as well as the hours
and other conditions of employment, are fixed by

3

A LIVING WAGE

the method of bargaining, according to which both
employer and employee try to obtain the best terms
possible. The latter strives to get as much as he
can ; the former, to pay no more than he must. Both
will derive some advantage from the bargain, but
more for one will mean less for the other. The
greater share of gain will be reaped by the stronger
bargainer. When, through a combination of labor-
ers, or employers, or both, collective is substituted
for individual action, the end, the procedure, and
the determining factors are essentially the same : the
decisive element is not moral, but psychical and
economic, namely, the relative bargaining power of
the contracting parties.

There are, indeed, many wage-contracts in which
bargaining power has no place, and many others in
which it is not the final determinant. The remuner-
ation of a large proportion of government employees
is fixed by law, and in some of the older trades and
services bargaining is limited by custom.^ Again,
there are to be found employers who will not force
wages below what they regard as a fair level, just as
there are laborers who will not exact compensation
that they believe to be unjust. On the whole, how-
ever, the labor-contracts affected by these forces of
law, custom and moral convictions are exceptional.-

So much for the prevailing practice ; what of the
underlying ethical theory? Are the laborers who

'Cf. Nicholson, "Principles of Political Economy," I, p. 325.

' Instances where the employer, believing in the "economy
of high wages," willingly pays more than the bargaining power
of the laborer could command, do not constitute exceptions to
the general rule, for even here the former tries to get his work
done as cheaply as possible.

AGAINST A LIVING WAGE

try to get all that they can, and the employers who
pay no more than they must, utterly indifferent to
the questions of right and wrong involved in the
wage-contract? Or, has business become so widely
separated from ethics that, although desirous of
being fair to each other, the parties to the labor-
contract do not advert in any way to its ethical as-
pects? Or, do they explicitly maintain that, despite
frequent and grave differences in the bargaining
power of the parties, the transaction is essentially
just? All three of these attitudes are undoubtedly
represented among both employers and employed. In
fixing wages, as in other actions, there are men who
will not hesitate to gain their ends by deliberate
dishonesty and extortion. Others ignore the moral
side of the wage-contract merely because it does not
attract their attention ; they are conscious only of a
business transaction. The greater number, however,
of those who strive to make the best possible bar-
gain, regardless of any formal ethical standard of
wages, seem to think that the contract is fair, inas-
much as it is free and made under the rule of com-
petition. To a very large extent this notion, as well
as the attitude of those who quietly ignore the moral
aspect of the rate of wages, is the result of practical
deductions from the teaching of the earlier English
political economists. "Indeed we may say that
political economy has importantly modified ethical
conceptions ; so that the price which com-
petition tends at any time to fix as the market price
of any kind of services, has been taken to represent
the universal or social — and therefore morally

5

A LIVING WAGE

valid — estimate of the 'real-worth' of such services."*
Now if political economy warrants this popular
conclusion it creates at once a presumption of some
value in favor of the justness of wages that are de-
termined by the method of unlimited bargaining.
The method is apparently sanctioned by the
authority of science. To what extent is this true?
It will conduce to clearness if a distinction be
made between political economy as a system of
supposedly rigid laws, and the practical precepts
that have been laid down for the guidance of in-
dustry by a certain school of economists.

II. Economic Law and the Rate of Wages. — '
Throughout the first three-quarters of the Nine-
teenth century political economy was committed to
the theory that the rate of wages was determined by
forces beyond the immediate control of either
laborer or capitalist.^ Wages, it was said, are paid
out of the fund of capital that has been saved from
the product of the past. The amount of this wage-
fund at any time was regarded as absolutely pre-
determined, and consequently not variable by agree-
ment between the parties to the wage-contract. If
any section of the laborers of a country succeeded
in raising their wages some other section or sections
would necessarily have their remuneration lowered.
The general rate of wages was therefore fixed by
an economic law that was as little subject to the wills
and efforts of men as the law of gravitation. It

* Sidgwick, "Principles of Political Economy," p. 504.

• See chapter on "The Verdict of the Economists" in
Webb's "Industrial Democracy."

6

AGAINST A LIVING WAGE

was consequently no more immoral than the action
of the tides.

Although the wage-fund theory is no longer held,
either by economists or by intelligent men generally,
an equally irrational belief in the power of econom-
ic laws to prevent any lasting modification in the
rates of wages by human action, seems to retain a
considerable body of adherents. It is cherished for
the most part by men who have a personal interest
in keeping wages low, or whose mental horizon is
circumscribed by limitations of personal experience,
education, intellect or will. In their opinion, the
most convincing reply that can be made to the de-
mand that the wage-contract be moralized, seems to
be the assertion that the rate of wages is fixed by
economic law. Is the assumption valid ? and if so
does the inference really follow ?

According to Marshall, an economic law "is a
statement that a certain course of action may be
expected under certain conditions from the mem-
bers of an industrial group."'- Hence a particular
economic law merely declares that, given certain
external conditions, men may be expected to per-
form such and such economic actions. It does not
say that they will act thus in all conditions, nor
does it specify how frequently the assumed con-
ditions will be present in actual life. For example,
the law which causes the workers in the Southern
cotton mills to be so poorly paid would not con-
tinue to operate there in changed conditions, and

^ "Principles of Economics," Book I, ch. VII. Cf, Ritchie,
"Darwin and Hegel," ch. V ; Keynes, "Scope and Method of
Political Economy," ch, VII.

7

A LIVING WAGE

the existing conditions differ from those that obtain
in the mills of Massachusetts. In the words of
Marshall, "economic laws are applicable to a very
narrow range of circumstances, which happen to
exist together at one particular place and time, but
quickly pass away." They are consequently quite
different from the laws of mathematics, which are
absolute and universal. The sum of the angles of
a triangle will equal two right angles always and
everywhere; but the law that an increase in the
supply of labor lowers wages, will not produce the
same effect among organized as among unorganized
workingmen.

The question whether the rate of wages is fixed
by economic law is chiefly a question of language.
The affirmation is in a sense true, but it is not a
very important or a very illuminating truth. At
any rate, the inference drawn from it — that wages
cannot be modified by human effort — is utterly in-
valid, and indicates a complete misunderstanding
of the character of economic laws. For the laws
are operative only in certain conditions, are de-
scriptions of what is likely to happen in certain con-
ditions, and are consequently dependent upon con-
ditions. But the conditions themselves — especially
in the field of distribution — are in large measure
under the control of men. Thus, it is an economic
law that in a competitive regime wages are regulated
by the inter-action of supply and demand, but these
factors are partly determined by the wills of the
buyers and sellers of labor. Supply will be re-
stricted by a combination of laborers; demand, by

8

AGAINST A LIVING WAGE

a combination of employers. Some of the dog-
matic assertions made concerning the inflexibihty of
economic laws imply the notion that the latter are
like the edicts of an all-powerful despot; whereas
the simple fact is that they are to a considerable ex-
tent moulded by the human beings whom they affect.
A strong Labor Union might meet the objection of
the employer, that efforts to get more pay must
prove futile, since wages are fixed by economic
law, with the declaration: "Yes, but we will help
to make the law."

The scope of economic laws is further restricted
by the fact that they describe, not what men must
do, but what they may be expected to do. Herein
they differ from the laws of physical nature, which
admit of no exception in the conditions to which
they apply. The laws of economics are not con-
cerned with purely physical forces, which operate
uniformly, blindly and necessarily, but with human
actions, and these are free. Hence, even where all
the external conditions are suitable, a particular
economic law may not work out its normal and
expected effect. For example, the condition of
supply and demand in a labor market may call for
a reduction in wages, yet a generous employer may
refrain from taking advantage of favorable con-
ditions, may do otherwise than he is expected to do,
and allow wages to remain at the present level. In
a word, economic laws describe uniform tendencies
rather than uniform modes of human action.

Indeed, the custom of speaking of economic laws
as producing, or tending to produce, certain effects

9

A LIVING WAGE

is confusing and ought to be avoided/ Subjective-
ly, they are merely statements of uniformity; ob-
jectively, they are relations of uniformity. The
element of compulsion or causality behind this
uniformity is contained in certain physical, social
and psychical forces. All of these can, to a greater
or less extent, be counter-acted by forces within the
control of man. In any concrete situation it is the
comparative strength of the two sets of forces that
decides the kind of economic action that will be pro-
duced. Whether any class of underpaid laborers
must continue to receive the meagre wages that the
system of unlimited bargaining now assigns to them,
depends upon whether the economic forces that pro-
duce this result can be overcome by forces working
in the opposite direction. The question has no real
relation to the abstract bogey that is sometimes
appealed to in the name of economic law.

III. The Practical Teaching of the Econo-
mists.— There is nothing, consequently, in the
nature of economic laws to render existing rates of
wages necessary, or the unrestricted use of bargain-
ing power morally legitimate. Let us now see what
warrant there is for the statement that economic
writers have regarded a contract made under com-
petitive conditions as just, and what value is to be
attached to their pronouncements in this matter.
In general, their views of the ethical aspects of
economic facts ought to have special weight be-
cause of their superior knowledge of the facts, and

^ Cf. Bonar, "Philosophy and Political Economy," pp. 194-
196.

10

AGAINST A LIVING WAGE

their superior facilities for applying ethical prin-
ciples. The authority attaching to their opinions
on the morality of unlimited free contract can be
overcome only through an examination of the logical
process by which they reached their conclusions.

The assertion is sometimes made that economists
have laid down no ethical doctrines of any kind, that
their province is merely that of positive fact, and
their work that of observation, analysis and in-
duction. The best reply to this statement is an ap-
peal to the facts of history. "While affecting the
reserved and serious air of students, political econo-
mists have at all times been found brawling in the
market place."^ This is especially true of the
"classical" or "orthodox" school of economists, who
held undisputed sway in England during the first
half of the nineteenth century. With the great
majority of these, says Edward Cannan, "practical
aims were paramount and the advancement of
science secondary."- As a rule they were men of
strong moral convictions, and, of course, advocated
no practical policy that in their view would be at va-
riance with the right. On the contrary, they taught
more or less explicitly that the measures which they
favored — notably, unlimited freedoin of competition
and contract — would naturally and automatically
bring about a regime of social justice. Professor
Sidgwick, who cannot be accused of unfriendliness
toward the traditional political economy, tells us that
"the teaching of political economists has generally

^ Toynbee, "Industrial Revolution," p. 25.
'"Production and Distribution," p. 384. Cf. Hobson,
"John Ruskin, Social Reformer," p. 99.

II

A LIVING WAGE

pointed to the conclusion that a free exchange, with-
out fraud or coercion, is also a fair exchange."^ The
logic of their teaching, therefore, has been that
wages freely bargained for would be just wages.
What were the reasons that led them to hold and
promulgate this theory?

The political economy of Adam Smith was based
partly on a priori assumptions and partly on induc-
tion.^ The a priori principles that he assumed as
valid and that did most to give his system its dis-
tinctive character were (a) the philosophical doc-
trine of an order, or law, of nature in favor of in-
dividual freedom, and (b) the theological doctrine
of an all-wise Being who will "maintain at all times
the greatest possible amount of happiness." ^ The
idea of a law of nature came to him principally from
the Physiocrats and the political doctrinaires who
flourished immediately before the French Revolu-
tion; the ideal to which it pointed, individual free-
dom, was the dominant aspiration of his age. The
order of nature meant that system of relations be-
tween man and man which had obtained or would
obtain in a state of nature. The lazv of nature, con-
sequently, required that political institutions and
restraints be reduced to a minimum. This being

^Article on "Political Economy and Ethics" in Palgrave's
Dictionary.

' See Ingram, "History of Political Economy," pp. 89-93 '>
Cohn, "History of Political Economy," chapter on Adam
Smith ; Cliffe-Leslie, "Essays in Political and Moral Phil-
osophy," chapter on Adam Smith ; Toynbee, "Industrial
Revolution," pp. 11-26; Sidgwick, "Principles of Political
Economy," pp. 19, 20 ; Bonar, "Philosophy and Political
Economy," chapter on Adam Smith ; Ely, "The Evolution of
Industrial Society." chapter on "Industrial Liberty."

•"Theory of Moral Sentiments," Part VI, sec. II, ch. III.
12

AGAINST A LIVING WAGE

accomplished, the equahty of men, which also was
a part of the order of nature, would secure for them
the greatest measure of well-being.^ Unlimited in-
dividual freedom was the practical ideal of those
"nature philosophers" who exercised so profound
an influence upon Adam Smith. It was, indeed, the
ideal of the age. Personal and political liberty was
preached and longed for in England, France and
America, as the one adequate remedy for the social
ills then existing. Adam Smith sought to have il
applied to industry. Every page of his writings,
says Toynbee, "is illumined by one passion, the
passion for freedom." The supreme need of the
hour, to his mind, was the removal of those petty
public and quasi-public restrictions that hindered
in the industrial world freedom of movement and
freedom of contact. Abolish these, and the laborers
would of themselves be able to realize their natural
economic equality and their longed-for economic
prosperity. "All systems either of preference or
restraint," he declared in a passage that has become
famous, "being thus completely taken away, the ob-
vious and simple system of natural liberty estab-
lishes itself of its own accord." ^

It is surprising that Adam Smith, whose work
abounds with proofs of his ability to observe facts
accurately, could enunciate a principle so contrary
to the fundamental facts of human nature and hu-
man conduct. Then as now, it must have seemed

* W. S. Lilly's interesting volume, "A Century of Revolu-
tion," contains a thorough, though severe, criticism of the
Revolutionary assumptions of liberty and equality.

* "Wealth of Nations," Book IV, ch. IX, final paragraph.

13

A LIVING WAGE

clear that the legal power to enter into contracts is
not sufficient to obtain for men the conditions
of well-being. Freedom from physical and politic-
al coercion does not of itself render men truly free
and equal in bargaining. The explanation seems to
be found in Smith's second a priori principle, which,
as so frequently happens with preconceived theories,
prevented him from seeing conditions as they ac-
tually were. This was the assumption of the all-
pervading beneficence of the Author of Nature.
Though man is by nature essentially selfish and aims
only at his private gain, he is led by an "invisible
hand" to promote the welfare of all. His most self-
ish acts redound, at least in the long run, to the
common good. Hence both individual and social
prosperity and justice are best secured and con-
served by allowing each to seek his own interests
in his own way, by setting up the system of com-
plete liberty, which is founded on the constitution
of nature and the benevolent designs of nature's
God.

These two assumptions of the supreme value of
individual Hberty, and the sufficiency of enlightened
self-interest, were adopted in substance by all the
great economists of England down to the middle of
the nineteenth century. Most of them, indeed,
cared little or nothing for — probably knew little of
— the philosophical and theological prepossessions
that underlay these theories of Adam Smith, but
they had no hesitation in advocating as the correct
principles of industrial action, abstention from com-
bination and regulation, unlimited competition, and

14

AGAINST A LIVING WAGE

the fullest individual liberty.^ They did not, how-
ever, preach competition and freedom of contract
as invariable laws, to be disregarded only under the
greatest peril ; that fault was committed by the pop-
ular expounders of political economy, chiefly jour-
nalists and politicians.- They did not explicitly
contend that wages fixed by bargaining in competi-
tive conditions would in every case be just. Indeed,
their primary aim was not with distribution at all.
Professor Sidgwick says that Adam Smith and his
followers sought before all else the improvement of
production.^ The question with them was how to
make the national product as great as possible at a
minimum of cost. And the answer seemed to them
to lie in the one word, competition. That the ex-
isting inequalities were far from ideal, they were
well aware; but they thought that the injury re-
sulting to production from any interference with
competition would more than off-set the improve-
ment in distribution.^ They made an unquestioning
act of faith in the beneficent and leveling influence
of competition. " Unrestricted freedom of action
and contract would tend to reduce the actually in-
evitable inequality of economic opportunities to the
lowest attainable minimum." ^ With inequality of
opportunity at a minimum, the prices of things, in-

' Sidgwick, "Principles," p. 399; KejTies, op. cit., pp. 70-74.
John Rae seems to be almost alone in opposing this view con-
cerning the classical school of economists: "Contemporary
Socialism," pp. 345-374, 2d edition.

^ Cliffe-Leslie, op. cit., p. 21.

^Op. cit., pp. 24, 396.

*SjdgT^■ick, op. cit., pp. 22, 400.

^Idem, p. 506.

15

A LIVING WAGE

eluding the price of labor, would correspond as close-
ly to the requirements of justice as could be expected
in a world inhabited by human beings. Now, this the-
ory of the equalizing force of unfettered competition
and unlimited freedom of contract, together with a
very inadequate observation of the facts of indus-
trial life, formed the basis of whatever claims the
older economists had to be regarded as judges of the
morality of wages fixed by the method of unlimited
bargaining. That their theory was false and their
study of facts one-sided,^ was abundantly proved by
the industrial experience of the land in which the
theory was most widely preached and most thor-
oughly tested. The rise of the factory system in
England and the introduction of the policy of
laissez-faire were, indeed, followed by a remarkable
increase in the production of wealth; but inequal-
ities of opportunity were not reduced to a minimum ;
the remuneration of labor did not tend to conform
to a measure of substantial justice. Nearly the
whole of the increase in wealth went to the newly-
made capitalists,^ while the wages received by the
laborers were barely sufficient to keep them alive.
The leveling influence of competition was confined
to the ranks of the workingmen, and its tendency
was invariably downward. Starvation wages com-
pelled husbands and fathers to send their wives and
children into the mills, with the result that their

* Regarding the incomplete inductions of the classical econ-
omists, see : Marshall, "Principles," Book I, eh. IV, par. 6 ;
Hobson, "The Social Problem," pp. 28-30 ; Ruskin, "Unto
This Last." essay i.

* Gibbins, "Industry in England," p. 381.

16

AGAINST A LIVING WAGE

own pay was still further reduced through this un-
natural competition between husband and wife, be-
tween father and child. To such an extent did
women and girls supersede men in the manufactur-
ing industry that the latter frequently were obliged
to remain at home to attend to the duties of the
household. Children from the workhouses were
impressed into the factories under a system of ap-
prenticeship that rendered their existence "literally
and without exaggeration that of slaves." In a
word, "the obvious and simple system of natural
liberty" advocated by Adam Smith and his suc-
cessors, brought, instead of a regime of justice, a
period of horror that is known in economic history
as the period of English Wage-Slavery.^

That these beliefs and hopes of the classical
economists concerning the ethical efficacy of com-
petition were utterly mistaken, is well understood
by the economists of to-day. The latter realize
very clearly that in some lines of production, at any
rate, the natural and normal result of the competi-
tive system is to have "our work done by a large
number of low-grade laborers, instead of by a com-
paratively small number of high-grade laborers."^
Whole classes of laborers, for example, those em-
ployed in sweat shops, are "'underpaid, underfed

^ For a general description of this period, see : Gibbins, op.
cit. pp. 381-406; "Alfred," "History of the Factory Move-
ment" ; Taylor, "Modern Factory System" ; Engels, "Condi-
tion of the Working Classes in England" ; Carlyle, "Past and
Present," Books I and III.

^ Hadley, "Economics," sec. 361. Cf. Lavasseur, "The
American Workman," p. 449 ; and in particular, Walker, "The
Vv'^ages Question," chapter on "The Degradation of Labor."

2 17

A LIVING WAGE

and undersupplied with everything which contrib-
utes to civiUzed Hfe." Contemporary economists
feel and acknowledge that conditions such as these
are at variance with the requirements of justice.
They are consequently desirous that competition
should be modified in various ways: by custom,
philanthropy, labor organizations and moderate leg-
islative action. Beyond this the majority of them
seem unwilling to go. In so far as they touch the
ethical aspect of the matter at all, they seem to hold
that the system of bargaining for wages satisfies the
demands of justice as fully as is at present practic-
able. The question of replacing the practice of un-
limited bargaining with a definitely moral standard
of wages is discussed not so much from the stand-
point of ethics, as from that of feasibility. This is
especially true of their attitude, in so far as they
have any, toward the standard of a Livmg Wage.
Their contention seems to be that even if this stand-
ard could be established in practice, for example,
by legislation, it would be productive of more social
harm than good. Professor Smart rejects the
Living Wage, and defends the present method of
unlimited bargaining on the ground that no more
satisfactory plan is workable outside of socialism.*
The existing freedom of contract secures for all "a.
certain rough kind of justice." President Hadley
likewise declares against the Living Wage as im-
practicable, and accepts the sliding scale as the fair-

^ "Studies in Economics," chapter on "A Living Wage";
and "Distribution of Income," ch. XXVIII.

i8

AGAINST A LIVING WAGE

est method of determining wages that has yet been
proposed. ^

The position of the two writers just named prob-
ably reflects the general views of all present day
economists except those who profess to give more
than usual attention to the moral aspects of in-
dustry. These naturally lay greater stress on the
immorality of unlimited bargaining, and pay less
attention to the difficulties in the way of a better
method. ^

IV. The Attitude of Nineteenth Century Leg-
islation Toward Unlimited Bargaining. — Since the
beginning of the Nineteenth century the laws of
England have allowed the fullest freedom of con-
tract in the determination of the wages to be paid
for all except government work. England is men-
tioned particularly because the history of her legis-
lative attitude toward the wage-contract during the
last century is typical of the greater part of Europe
and of the whole of North America, and because
she was the first to adopt the policy of non-regula-
tion. The causes of the changed attitude of the
law are very much the same as those which induced
the economists to advocate unlimited competition
and freedom of contract. The Industrial Revolu-
tion had rendered the old regulations of industry
inadequate and harmful, and the dominant political
ideal of the day was wider liberty for the individual.
Thus the champions of non-interference with the

^"Economics," sees. 404-406. Cf. Leroy-Beaulieu, "Traite
theorique et pratique," vol. ii, p. 484, sq.

* Cf. Ely, "Outlines of Economics," p. 206, ist edition;
Hobson, "The Social Problem," chaps. II, VII.

19

A LIVING WAGE

industrial activity of the British subject were able
to enforce their theoretical arguments by pointing
to the disastrous results of the opposite policy.
Prominent among these champions were the econ-
omists, whose influence upon English legislation
during the first half of the Nineteenth century has
not been equalled in any other time or country.
Ricardo alone, we are told by Toynbee, revolution-
ized the economic thought of the British Parliament
during his brief stay in that body. Again, the mid-
dle classes, who were rapidly gaining in wealth and
political power, urged the laissez-faire policy be-
cause they felt that "with freedom they were more
than a match for all competitors." The effect of
these combined forces was to restrict state regula-
tion of industrial life to the narrowest proportions
known to history.

The causes of the regime of non-interference in
America are included among those just described.
The influence of the economists was not as great as
in England ; but the cult of individual freedom, and
the self-confidence and self-assertion of the middle
classes, were for a long period the dominant forces
in shaping, both positively and negatively, the course
of legislation regarding industry.

Obviously, the attitude of the civil law toward
the wage-contract, or toward any other human
action or institution, is not per se a criterion of the
morally good. The ordinances of legislatures are
not always in accord with the principles of right
and justice. The fact that the laws of a country
allow its citizens by means of free contract to depress

20

AGAINST A LIVING WAGE

wages to the starvation level, or enhance them be-
yond the limits of extortion, does not make the
transaction just; but, since legislatures should, and
generally speaking do, endeavor to promote just
dealings in the more important social relations,
there arises a presumption in favor of any institu-
tion that the law sanctions and protects.

In the present case the presumption vanishes as
soon as we examine the causes of the legislation.
As above described, these causes may be reduced to
three : the insufficiency of the old restrictions ; the
fancied sufficiency of individual freedom; and the
selfishness of the middle classes. The first afforded
a good reason for such new legislation as would be
appropriate to the new conditions of industry, but
not for the anarchical policy of non-interference;
the second was a hypothesis that has been utterly
discredited by the subsequent history of industrial
development, — individual freedom has not brought
either economic equality or economic justice ; while
the third should have been checked, instead of
fostered, by legislation.

The presumptions in favor of the existing method
of fixing wages and against the principle of a Living
Wage which are drawn from the teaching of polit-
ical economy and the attitude of the law, disappear,
therefore, when we realize the reasons upon which
this teaching and this attitude were based. Eco-
nomic laws are not inexorable, are not independent
of the wills of the men whose actions they describe,
do not compel wages to be adjusted by an unlimited
use of the economic strength of the bargainers, and

21

A LIVING WAGE

do not render existing rates of wages just. The
practical recommendations of the economists and
the ordinances of the legislators can be traced to
false principles, false reasoning, incomplete analy-
sis of facts, and the selfishness of the dominant in-
dustrial class. Consequently the doctrine of a Liv-
ing Wage cannot be refuted or put in peril by any
mere appeal to economic or legal authority. The
contention of those economists of our own time who
maintain that a Living Wage is impossible of appli-
cation will be examined later. In the meantime it
will, perhaps, not be unprofitable to review briefly
the chief authorities, contemporary and historical,
that are against the method of unrestricted bargain-
ing and in favor of a professedly ethical standard.

22

CHAPTER II

Some Authorities in Favor of an Ethical
Standard for Fixing Wages.

Wages in England formerly regulated by law. Quasi-le-
gal regulation through the gilds, custom, and the regula-
tion of the price of goods. Teaching of Catholic authorities
on the right to a livelihood and on just price. And on the
customary rate of wages. Teaching of Leo XIII on a Liv-
ing Wage. Was not the first to declare this principle. At-
titude of representative Protestants. Contemporary opinion
in favor of the Living Wage principle. Attitude of the lab-
or unions. Some instances of a legal minimum wage. Con-
clusion that the weight of opinion is against the method of
unlimited bargaining.

I. Legislation Concerning Wages. — The policy

of indifference which nearly all governments pursue
with reference to the wage-contract to-day has not
prevailed always. From the year 1349 to the year
1563 the remuneration of the unskilled laborers of
England, both in town and country, was regulated
by law, by the various "Statutes of Laborers" that
were re-enacted or amended by nearly every mon-
arch that reigned during those two centuries. In
the last named year was passed the famous "Statute
of Elizabeth," which applied not only to the un-
skilled workers, but "to the greater part of the in-

23

A LIVING WAGE

dustry of the period."^ It continued on the statute
oooks down to 1813, when, at the bidding of capital-
ists and poHtical economists, but against the protest
of the laboring class, it was "peremptorily repealed."
A great economic historian has contended that from
first to last these laws regulating wages were de-
signed to, and actually did, benefit the employer at
the expense of the workingman. The first of them
was, indeed, framed for the express purpose of re-
ducing the unusually high wages which prevailed
in consequence of the Black Death of 1348. In
general, the legal rate of wages was for a long time
a maximum which both master and man were for-
bidden to exceed, and the "Statute of Elizabeth"
was almost invariably administered unfavorably to
the laborer. According to the provisions of this
act, wages were fixed by the justices of the peace,
who were in most cases employers or men friendly
to the employing class. This policy, together with
the disastrous effects of the debasement of the
currency and the confiscation of the gild lands by
Henry VIII, and the progressive separation of the
workers from their little plots of land and from
their rights over the Common, had no doubt gone
very far toward making "low wages and famine
wages traditional." ^ And yet we find that again and
again during the eighteenth century the working-
men appealed to the justices and to the House of
Commons to enforce and re-establish the legal regu-

^ Webb, "History of Trade Unionism," p. 42.
' Thorold Rogers, "The Economic Interpretation of His-
tory," p. 43.

24

STANDARD FOR FIXING WAGES

lation of wages, ^ However this may be, the ques-
tion that concerns us now is not whether the laws
fixing wages were favorable to the laborers, but
whether the English people did not for centuries be-
lieve that wages determined by free contract were
not necessarily just. That they believed in an ob-
jective standard of justice, a standard independent
of the terms of the wage-agreement, is evident from
their continued efforts to regulate the remuneration
of labor by law. ^

The policy of legal regulation was carried out not
only by means of the formal enactments just de-
scribed, but also through the rules and customs of
the gilds. During a considerable part of the
Middle Ages the rates of wages determined by the
gilds had virtually all the force of public laws.
There was, moreover, an indirect regulation through
the legal or quasi-legal regulation of the price
of goods. If a gild was able to fix wages so
effectively that no one ever thought of departing
from them, it performed the essential functions of
a civil legislator; and if the central authority, or
the municipality, or the gild, or even custom, deter-
mined the price of goods it virtually determined
the price of labor. And this legal supervision of
the rewards of labor, direct or indirect, explicit or

^ Webb, "History of Trade Unionism," pp. 42-54.

'A detailed account of the different "Statutes of Laborers"
enacted by the English Parliament will be found in Thorold
Rogers "Economic Interpretation of History," ch. II. See al-
so articles, "Government Regulation of Industry," "Laissez-
Faire," and "Statute of Laborers," in Palgrave's Dictionary
of Political Economy.

' See Brants, " Theories economiques aux xiiie et xi\'e siecles,"
p. 201, sq.

25

A LIVING WAGE

virtual, seems to have prevailed not only in England
but throughout Western and Southwestern Europe
during the whole of the later Middle Ages, The
accepted principle of medieval society, say Sidney
and Beatrice Webb, was that some kind of social
organization was necessary in order to protect the
standard of life of the workers, and to prevent their
degradation.^ The sense of solidarity, mutual de-
pendence and mutual responsibility among the mem-
bers of a community, the conviction that the indus-
trial world should be ordered by law, rather than
left to individual caprice and selfishness, were far
more prominent in the thought of that period than
they are to-day. ^ Hence, "every sort of economic
transaction in which individual self-interest seemed

to lead to injustice " was regulated "by the

general principle that a just or reasonable price only
should be paid."^

II. The Teaching of Christian Theological and
Ethical Writers. — This attitude of the public and
of legislators was the result of Christian conceptions
of fair dealing, and of the widespread influence of
the Christian Church, Christianity succeeded in
the Middle Ages in "moralizing industrial and
commercial conceptions and institutions," and it
impressed men "with a keen sense of personal re-
sponsibility in the employment of secular power of
every kind."* It was the uniform teaching of the

^"History of Trade Unionism," p. 19.

' Cf. Gierke, "Political Theories of the Middle Age," p. 7.
sq., translated by Maitland.

'Ashley, "English Economic History," vol. i, p. 181.

* Cunningham, "Western Civilization," vol. ii, pp. 104, lOS.

26

JTANDARD FOR FIXING WAGES

Fathers of the Church and of the medieval theo-
logians that every human being had an imperishable
right to a livelihood from the common bounty of
nature. This they regarded as a natural right, in-
dependent of and superior to all human laws, con-
ventions and institutions. According to this doc-
trine, therefore, the laborer was endowed with an
absolute right to at least sufficient remuneration
to maintain his life. Moreover, the principle that
the laborer should receive just wages was virtually
contained in the canonist doctrine of just price.
The theologians and canonists held that every
commodity had a certain fair valuation, or just price,
which was independent of the arbitrary and fortui-
tous valuation resulting from the higgling of the
market.^ The just price in any market being deter-

^The somewhat puzzling doctrine of "just price" is not
always understood by either its critics or its defenders. 1 he
former sometimes assert that it was based on an incorrect
analysis of the phenomena that give rise to commercial values,
individual and social. This is a complete misconception ; for
the doctrine in question was not an attempt to explain the
actual, but to describe the ideal. Comparisons instituted be-
tween it and modern theories of value are, therefore, entirely
irrelevant. A theory of value is a scientific explanation of
the ultimate causes of the values that prevail or tend to pre-
vail in a regime of free contract. Now the medieval writers
concerned themselves very little with this question : First, be-
cause values and prices were in their time fixed for the most
part by law or by custom ; and, second, because their main pur-
pose was to lay down rules for knowing the price at which a
thing ought to sell, not to tell the price at which it would sell.
Even if they had held, as some modern writers have asserted,
that the just price of a commodity was something strictly in-
trinsic— a belief that cannot be correctly attributed to any one
of them — their teaching would not conflict with economic
theories of value. (Cf. Cunningham, "Western Civilization,"
vol. ii, pp. 78-80.) The doctrine of just price may sometimes
have been associated with incorrect views of industrial life,
but all competent authorities agree that it was a fairly sound

27

A LIVING WAGE

mined by the appraisement of the general pubHc, it
was said to be measured by the "communis aesti-
matio." To ascertain the just price of any article,
account had to be taken of its general utility, scar-
city and cost of production. The last element, which
in the Middle Ages was chiefly represented by labor
expenditure, was regarded as the most important.
When, therefore, the medieval theologians and
canonists taught that a just price should be paid for
every commodity, and that its chief determinant was
Iribor-cost, they virtually insisted that the laborer
should be paid just wages.^

To the searcher for explicit and precise rules for
determining what is a fair remuneration for labor,
the medieval writers are, indeed, disappointing.
St. Thomas Aquinas says that, as justice demands
that a fair price be paid for a material commodity,

attempt to define the equities of medieval exchanges, and that
it was tolerably successful in practice.

On the other hand over-zealous apologists of the doctrine
have tried to show that the "communis aestimatio," which was
held to be the proximate criterion of just price, is essentially
the same as that complex of social forces that fixes present
market prices, and that some modern writers have called "the
social estimate." The resemblance is only of name. The com-
mon estimate of which the canonists spoke was a conscious
social judgment that fixed prices beforehand, and was ex-
pressed chiefly in custom, while the social estimate of to-day
is in reality an unconscious resultant of the higgling of the
market, and finds expression only in market price.

For a complete exposition of the doctrine of just price,
with abundant citations and references, see : "LTdee du jviste
prix," by Henri Garnier ; and "Allgemeine Grundlagen der
Nationaloekonomie," ch. XV, by Julius Costa-Rosetti. Brants
in the work already cited, chap. V. and p. 193 ; Ashley in
"Economic History," vol. i, p. 134, sq. ; and Cunningham in
"Growth of English Industry," vol. i, p. 323, sq., are also quite
satisfactory.

* Cf . Brants, op. cit., pp. 107-116.
28

STANDARD FOR FIXING WAGES

so it demands that a fair price should be given for
human labor. ^ Other writers likewise content
themselves with the general declaration that wages
should be in accordance with justice. Their failure
to be more specific seems to be explained by the
industrial conditions of the time. During the great-
er part of the Middle Ages there was, properly
speaking, no such thing as a wage system ; for there
was no class of laborers, either in town or country,
depending solely on employers to whom they sold
their labor. ^ The master craftsmen in the towns
and the men who tilled the soil on their own account,
received just wages if they received a just price for
their products. Even after the rise of a distinct
laboring class — that is, men who could never hope
to become master craftsmen, or men who spent the
greater part of their time in the service of the lords
of the domain — the question of just wages was not
of supreme importance. In town industries the
journeymen were quite commonly fed and lodged
by their employers ; ^ the relations between masters
and journeymen were akin to those existing between
father and sons ; * and between the average earnings
of the two classes there was not a great difference. ^
Agricultural laborers usually had possession of a
piece of ground, to the cultivation of which they
^"Summa Theologica," la. 2ae., q. 144, a.i.

* Gibbins, op. cit., vol. ii, p. loi ; Ashley, op. cit., vol. ii, p.
loi ; Levasseur, "Histoire des classes ouvrieres avant 1789,"
vol. I, p. sg8.

'Levasseur, op. cit., vol. i, p. 455 ; Brants, op. cit., p. 123 ;
Martin-Sainte-Leon, "Histoire des corporations des metiers,"

p. 155.

* Ashley, op. cit., vol. ii, p. 103.

'Levasseur, op. cit., vol. i, p. 313; Brants, op. cit., p. 123.
29

A LIVING WAGE

devoted their leisure time, and from which they ob-
tained part of their sustenance. ^ These conditions
were not, indeed, universal, nor did they always
secure for the laborer a reasonable living, but they
explain sufficiently the failure of medieval writers
to treat specifically the question of just wages.

Later on, when the wage-earning class assumed
greater proportions, we find the ethics of their
remuneration explicitly discussed by theological
writers. Molina, De Lugo, and Bonacina, writing
about the beginning of the seventeenth century,
declare that in general that wage is just which is
customary for a given service in a given place.^ The
two first mentioned say that a wage insufficient for
the subsistence of some laborers, will nevertheless
be fair when there are many who willingly sell their
services for that amount. We are told that numer-
ous workers do accept this lower wage, either be-
cause they have other sources of income, or because
they can live more cheaply than fellow members of
their own class. From the context it would seem
that both Molina and De Lugo assume that the
laborer has a right to a living from his toil, and that
their chief concern in the passages cited is with cases
in which the circumstances are exceptional. ^ At
any rate, they do not discuss the question of a Liv-
ing Wage adequately and in all its relations. The
only general standard of just remuneration that they

^ Gibbins, op. cit., p. iii.

* Molina, "De Contractibus," disp. 506, nos. 2, 3, 4 ; De
Lugo, "De Jure et Justitia," disp. 29, no. 62 ; Bonacina, "De
Contractibus," disp. 3, q. 7.

^ Cf. Vermeersch, "Quaestiones de Justitia," pp. 572, 573 ;
Pettier, "De Jure et Justitia," pp. 234-241.

30

STANDARD FOR FIXING WAGES

lay down is custom. Whether the customary wages
of those days compHed with the requirements of a
Living Wage, as then understood, is not easily
determined. However, since wages remained sta-
ble during long periods of time, and since the direct
influence of religious and moral teaching on eco-
nomic life was very considerable — much greater
than at present — it may well be that the essentials of
a reasonable wage were fairly well realized.

From the time of the writers just mentioned
down to the year 1891, the theological and canonist
doctrine on the ethics of wages seems to have
undergone no important development. The old
phrases about customary wages and just wages are
constantly recurring. A curious instance of this
unprogressiveness is found in the pages of the canon-
ist, Reiffenstuel, one of the ablest authorities on the
legislation of the Church. He maintained that it was
wrong for an employer to pay a laborer less than
was usual in similar circumstances, but that when
the usual wage was paid all obligations of justice
were satisfied, even though it did not suffice for a
livelihood.^ According to this interpretation, the
"customary wages" of the medieval theologians
and canonists become "current wages," and the
"common estimate" of just wages becomes the wa-
ges that men actually pay in the strife of competitive
bargaining. What was in the minds of the School-
men a conscious moral judgment is thus converted
into an unconscious resultant of men's efforts to buy

*"Jus Canonicum," lib. Ill, Decretal., tit. XVIII, nos. 108-
114.

31

A LIVING WAGE

cheap and sell dear. The author's principle would
justify starvation wages if these were common to a
whole class.

In the year 1891, the late Pope Leo XIII formu-
lated the doctrine of a minimum Living Wage in
his celebrated encyclical, "Rerum Novarum," better
known by the title, "On the Condition of Labor."
Its most important passages relative to the present
matter are the following:

"We now approach a subject of very great im-
portance, and one on which if extremes are to be
avoided right ideas are absolutely necessary. Wa-
ges, we are told, are fixed by free consent, and there-
fore the employer, when he has paid what was
agreed upon, has done his part and is not called upon
for anything further. The only way, it is said, in
which injustice could happen would be if the master
refused to pay the whole of the wages, or the work-
man would not complete the work undertaken;
when this happens the State should intervene to see
that each obtains his own, but not under any other
circumstances.

"This mode of reasoning is by no means convinc-
ing to a fair minded man, for there are important
considerations which it leaves out of view altogeth-
er. To labor is to exert one's self for the sake of
procuring what is necessary for the purpose of life,
and most of all for self-preservation. Tn the sweat
of thy brow thou shalt eat bread.' Therefore, a
man's labor has two notes or characters. First of
all, it is personal; for the exertion of individual
power belongs to the individual who puts it forth,

32

STANDARD FOR FIXING WAGES

employing his power for the personal profit for
which it was given. Secondly, man's labor is neces-
sary; for without the results of labor a man cannot
live ; and self-conservation is a law of nature which
it is wrong to disobey. Now if we were to consider
labor merely in so far as it is personal, doubtless it
would be within the workman's right to accept any
rate of wages whatever ; for in the same way as he
is free to work or not, so he is free to accept a small
remuneration or none at all. But this is a mere ab-
stract supposition ; the labor of the workman is not
only his personal attribute, but is necessary ; and
this makes all the difference. The preservation of
life is the bounden duty of each and all, and to fail
therein is a crime. It follows that each one has a
right to procure what is required in order to live:
and the poor can procure it in no other way than by
work and wages.

"Let it be granted, then, that as a rule workman
and employer should make agreements, and in par-
ticular should freely agree as to wages ; nevertheless,
there is a dictate of nature more imperious and
more ancient than any bargain between man and
man, that the remuneration must be enough to sup-
port the wage earner in reasonable and frugal com-
fort. If through necessity, or fear of a worse evil,
the workman accepts harder conditions because an
employer or contractor will give him no better, he is
the victim of fraud and injustice."

Pope Leo XIII was not, indeed, the first Catholic
authority to proclaim this principle of a Living
Wage. It had already been more or less explicitly

3 33

A LIVING WAGE

laid down and defended by Ketteler in Germany,
Vogelsang in Austria, de Pascal in France, Pottier
in Belgium, and Manning in England. ^ It was
the principle of social justice that was clearest and
most definite in the consciousness of those numerous
groups of Catholic thinkers and agitators who dur-
ing the preceding quarter of a century had been
seeking a remedy for the industrial ills of modern
Europe. It was at least a partial application to ex-
isting economic conditions and institutions of the
traditional theological and canonist doctrine of just
price. Indeed, it was the activity of this Catholic
social movement that, more perhaps than all other
influences together, led the late Pontiff to issue the
encyclical, "On the Condition of Labor." In a con-
versation with the Swiss social reformer, Gaspard
Decurtins, Pope Leo referred to the father of the
movement. Archbishop Ketteler, as his "great fore-
runner." Nevertheless, it was his encyclical that
converted the Living Wage doctrine from an im-
plicit into an explicit principle of Catholic ethics.

Owing to the individualistic tendencies of Prot-
estantism, its many forms, and the nature of its
organization, the Protestant teaching on an ethical
standard of wages as against the standard of un-
limited bargaining, is less pronounced and less
uniform than that of the Catholic church. It is,
therefore, much more difficult of adequate presenta-
tion in a brief survey. Attention may, however, be
called to one or two important facts. No Protestant
denomination has ever signified its approval of the

^ Cf. Nitti, "Catholic Socialism," passim.
34

STANDARD FOR FIXING WAGES

principle of unlimited bargaining, either formally
or through the expressions of its leading representa-
tives. On the contrary, numerous and able repre-
sentatives of the leading denominations have fre-
quently protested against the doctrine, and insisted
that to take advantage under the guise of a free
contract of the necessities of the laborer is to violate
the principles of Christianity. Chief among them
are: Kingsley, Maurice, Hughes, and Headlam in
England ; Pastors Stocker and Todt in Germany ;
Gide and Waddington in France ; and Bishop Potter
and Dr. Gladden in the United States. The first
three groups of writers founded or identified them-
selves with organizations for Christian social reform
which have had a very large influence. ^

III. Contemporary Opinion Regarding an
Ethical Standard of Wages. — The ethical theory
underlying the method of unlimited bargaining,
namely, that contracts made without force or fraud
are necessarily fair, is, despite the prevailing prac-
tice, condemned by the majority of disinterested
persons. This attitude of mind is most clearly
shown in the widespread conviction that the ex-
orbitant prices charged and the enormous profits
obtained by some of the great trusts are not only a
menace to public welfare, but positively unjust and
dishonest. ^ Yet the contracts by which this result
is brought about are all free. Speaking of the
exorbitant profits made by a prominent corporation
in the manufacture of steel rails, a capitalist and ex-

^ Cf. Nitti, op. cit., pp. 85-99 ; and Rae, "Contemporary
Socialism," pp. 220-242.

^ Cf. Sidgwick, "Methods of Ethics," p. 288, 6th ed.

35

A LIVING WAGE

senator of the United States not long ago declared :
"If this is not robbery I would like to find some
stronger word to characterize it." With this view
practically the whole of the American people would
agree. Nevertheless, the purchasers of steel rails
are neither deceived nor coerced; the transaction is
free. Again, the money shark who trades on the
distress or ignorance of the poor by charging ex-
orbitant rates of interest, gives his victims the
benefit of a free contract ; yet he is restrained by the
civil law and condemned by the public conscience.
Similarly with bargains where the subject matter
is human services. A drowning man calls to an-
other for help. The latter replies : "I will save you
if you pay me a million dollars." The distressed
millionaire prefers life on this hard condition to
death without it, and quickly closes the contract.
The contract was free, was a source of some gain
for both parties, but who would affirm that it was
just? And the employer who takes advantage of
the need of his fellow man and hires him at starva-
tion wages, has merely made a free bargain. The
laborer agrees to the harsh conditions because they
mean for him the preservation of life; they repre-
sent an advantage as compared with the alternative
of starvation. Still, with the exception of the em-
ployer and those who look at the matter from his
point of view, the entire community would insist that
somehow the transaction was wrong. In the words
of Dr. Cunningham, "we feel that it is unfair for
the economically strong to wring all that he can out

36

STANDARD FOR FIXING WAGES

of the economically weak." ^ Hence, in a dispute
between an employer and his poorly-paid laborers,
public sympathy is invariably on the side of the
latter. Indeed, it may be said with confidence that
the common sense and unbiased convictions of the
community not only repudiate the theory that free
contracts are always just, but maintain that when
the laborer is compelled to accept less than a cer-
tain decent minimum of remuneration he is in truth
defrauded.

Belief in the Living Wage principle has always
been more or less firm in the consciousness of the
laborer himself, but only recently has it taken the
form of an explicit demand. - In England the
right to a minimum of pay has become one of the
fundamental assumptions of Trade Unionism. "It is
a vital principle," says one of the Trade Union lead-
ers, "that a man by his labor should live, and not-
withstanding all the teachings of political economists
and all the doctrines taught by way of supply and
demand, a greater doctrine overrides all these, the
doctrine of humanity." ^

The Labor Unions of America do not often use the
phrase, "a Living Wage," nor explicitly outline the
concept that it represents, but they express the
same idea in their "Union Scale." This is the rate of
wages that the Union demands for its members in
any particular industry. It is in reality the mini-
mum that the Unionists regard as compatible with

^ "Western Civilization," vol. ii, p. 80.

' Webb, "Industrial Democracy," p. 582, sq.

'Idem, loc. cit.

37

A LIVING WAGE

right living. They reject, therefore, the standard
of unHmited bargaining, inasmuch as they estabHsh
a minimum; and they substitute the standard of a
Living Wage, inasmuch as they look upon this
minimum as the lowest rate for which a man ought
to work. It might be objected that the Union Scale
is not intended to be an ethical standard, but merely
represents what the Unionists think they are strong
enough to obtain. It is true that they try to get as
high a wage as possible, but this is a matter of prac-
tical policy arising out of actual conditions. Behind
it is always the conviction that there is involved a
question of morals. They believe that they ought
to have at least sufficient remuneration to afford
them a decent livelihood. Many of them, indeed,
hold that they have a right to more than this
minimum ; but this is merely an additional proof
that the idea of an ethical standard is present to
their consciousness. ^

Nor is the principle of the minimum wage entire-
ly unknown to existing legal codes. The Compul-
sory Arbitration act of New Zealand decrees that
minors shall not be employed in factories for less
than a certain sum per week, and that all laborers
on public contracts shall receive at least the rates of
wages that "are considered usual and fair in the
locality." In Victoria, Australia, legal boards have
been created with authority to establish a minimum

^ Cf. the address, "A Living Wage," delivered by President
Gompers before the Nineteenth Century Club, and printed in
the "American Federationist" for April, 1898; also the testi-
mony of Presidents Gompers and Schaffer before the U. S.
Industrial Commission ; vol. vii, pp. 397, 614 of the Report
of the Commission.

38

STANDARD FOR FIXING WAGES

wage, for the express purpose of preventing the
remuneration of any class of workers from being
reduced below the cost of living. And the New
Zealand Court of Arbitration is empowered to fix
a minimum wage that will apply, not only to the
parties interested in any particular dispute, but to
all who are "connected with or engaged in the indus-
try to which the award applies within the industrial
district to which the award relates,"

The brief discussion of the authorities for and
against the practice of unlimited bargaining con-
tained in this and the preceding chapters, is not, of
course, an adequate historical review of the subject.
It has, however, a certain value, inasmuch as it gives
some notion of the different attitudes which men
have taken toward the ethical side of the wage-con-
tract. For if there is any field of study in which
principles stand out in clearer light when they are
seen as others see them, it is the field of ethics, and
especially of applied ethics. Every new viewpoint
that is taken, every new opinion, no matter how fan-
tastic, that is considered, contributes something to
our understanding of the nature and bearing of
ethical truths.

Our conclusions from the present study are : first,
that men have always regarded the fixing of wages
as in some degree an ethical action ; and, secondly,
that the preponderance of human opinion is decided-
ly against the method of unlimited bargaining. The
belief that the amount of remuneration given the
laborer is entirely devoid of moral aspects, in other
words, that "there is no such thing as fair wages,"

39

A LIVING WAGE

has never been held by any considerable section of
any community. Either explicitly or implicitly men
have always been virtually unanimous in the con-
viction that the standard for determining wages
should be a moral standard. Even the method of
unlimited bargaining, which is on its face non-
ethical, was advocated by economists and legislators
chiefly because they believed that its results would
be morally good. They expected it to bring about
the greatest attainable measure of social iustice.
Indeed, so long as men remain ethical beings, they
cannot ignore the moral aspects of any particular
policy that they recommend. ^ Finally, although
the method of unlimited bargaining is the prevailing
one, it is less than one century in existence, and was
established through the mistaken efforts of econo-
mists and legislators. Previously to that period,
it was frowned upon by the political, religious and
moral forces of society. It is condemned to-day,
not merely by the laborers, but by the moral sense
of the greater and saner part of the community.

' Cf. Professor Foxwell's Introduction to Menger's "Right
to the Whole Produce of Labor," p. xi.

40

SECTION II

THE BASIS, NATURE, AND CON-
TENT OF THE RIGHT TO
A LIVING WAGE

CHAPTER III

The Basis and Justification of Rights

The claim to a Living Wage is a right. Character and
purpose of rights. Sense in which natural rights are ab-
solute. Men's natural rights are equal in the abstract, but
unequal in the concrete. They are based on the duty of
pursuing self-perfection. Other methods of establishing
their validity. The doctrine of natural rights incompatible
with individualistic hedonism. The positivistic theory of
rights means in the concrete that some lives are worth less
than others. It has less theoretical weakness when stated
in terms of Hegelianism. Fallacy of the popular argument
against natural rights. The exaggeration of natural rights
in the system of the Revolutionary philosophers. The
doctrine as here advocated holds a middle ground between
semi-anarchism and state absolutism.

The thesis to be maintained in this volume is that
the laborer's claim to a Living Wage is of the na-
ture of a right. This right is personal, not merely
social : that is to say, it belongs to the individual as
individual, and not as member of society; it is the
laborer's personal prerogative, not his share of social
good; and its primary end is the welfare of the
laborer, not that of society. Again, it is a natural,
not a positive right ; for it is born with the individ-
ual, derived from his rational nature, not conferred
upon him by a positive enactment. In brief, the

43

A LIVING WAGE

right to a Living Wage is individual, natural and
absolute,

A right in the moral sense of the term may be
defined as an inviolable moral claim to some personal
good. When this claim is created, as it sometimes
is, by civil authority it is a positive or legal right;
when it is derived from man's rational nature it is
a natural right. All rights are means, moral means,
vv^hereby the possessor of them is enabled to reach
some end. Natural rights are the moral means or
opportunities by which the individual attains the
end appointed to him by nature. For the present
it is sufficient to say that this end is right and reason-
able life. The exigencies of right and reasonable
living, therefore, determine the existence, and num-
ber, and extent of man's natural rights. Just as his
intellectual, volitional, sensitive, nutritive and motive
faculties are the positive, or physical, agencies by
which he lives and acts as a human being, so his nat-
ural rights are the moral faculties requisite to the
same end. He cannot attain this end adequately un-
less he is regarded by his fellows as morally immune
from arbitrary interference. They must hold them-
selves morally restrained from hindering him in the
reasonable exercise of his faculties. His powers
of intellect, will, sense, nutrition and motion will be
of little use to him if his neighbors may licitly de-
prive him, whenever it may suit their convenience,
of his external goods, or his liberty, or his mem-
bers, or his life. In addition to his positive powers,
he stands in need of those moral powers which give
to his claim upon certain personal goods that char-

44

JUSTIFICATION OF RIGHTS

acter of sacredness which restrains or tends to re*
strain arbitrary interference by his fellows.

Man's natural rights are absolute, not in the sense
that they are subject to no limitations — which would
be absurd — but in the sense that their validity is not
dependent on the will of anyone except the person
in whom they inhere. They are absolute in ex-
istence but not in extent. Within reasonable limits
their sacredness and binding force can never cease.
Outside of these limits, they may in certain con-
tingencies disappear. If they were not absolute to
this extent, if there were no circumstances in which
they were secure against all attacks, they would not
deserve the name of rights. The matter may be
made somewhat clearer by one or two examples.
The right to life is said to be absolute because no
human power may licitly kill an innocent man as a
mere means to the realization of any end whatever.
The life of the individual person is so sacred that,
as long as the right thereto has not been forfeited by
the perverse conduct of the subject himself, it may
not be subordinated to the welfare of any other in-
dividual or any number of individuals. Not even
to preserve its own existence may the State directly
and deliberately put an unoffending man to death.
When, however, the individual is not innocent, when
by such actions as murder or attempted murder he
has forfeited his right to live, he may, of course, be
rightfully executed by civil authority, or killed in
self-defense by his fellow man. He may also be
compelled to risk his life on behalf of his country,
for that is a part of his duty ; and he may with en-

45

A LIVING WAGE

tire justice be deprived of life indirectly and inci-
dentally, as when non-combatants are unavoidably
killed in a city that is besieged in time of war.
Again, the right to liberty and property are not
absolute in the sense that the individual may have
as much of these goods as he pleases and do with
them as he pleases, but inasmuch as within reason-
able limits — which are always determined by the
essential needs of personal development — these
rights are sacred and inviolable.

With respect to their natural rights, all men are
equal, because all are equal in the rational nature
from which such rights are derived. By nature
every man is a person, that is, a rational, self-active,
independent being. Every man is rational because
endowed with the faculties of reason and will. His
will impels him to seek the good, the end, of his
being, and his reason enables him to find and adjust
means to this end. Every man is self-active, inas-
much as he is master of his own faculties and able in
all the essentials of conduct to direct his own actions.
Every man is independent in the sense that he is
morally complete in himself, is not a part of any
other man, nor inferior to any man, either in the
essential qualities of his being or in the end toward
which he is morally bound to move. In short,
every individual is an "end in himself," and has a
personality of his own to develop through the exer-
cise of his own faculties. Because of this equality
in the essentials of personality, men are of equal
intrinsic worth, have ends to attain that are of equal
intrinsic importance, and consequently have equal

JUSTIFICATION OF RIGHTS

natural rights to the means without which these
ends cannot be achieved.

Only in the abstract, however, are men's natural
rights equal. In the concrete they are unequal,
just as are the concrete natures from which they
spring. ^ This is not to say that equality of rights
is an empty abstraction, without any vital meaning
or force or consequences in actual life. Men are
equal as regards the number of their natural rights.
The most important of these are the rights to life,
to liberty, to property, to a livelihood, to marriage,
to religious worship, to intellectual and moral edu-
cation. These inhere in all men without distinction
of person, but they have not necessarily the same
extension, or content, in all. Indeed, proportional
justice requires that individuals endowed with dif-
ferent powers should possess rights that vary in de-
gree. For example, the right to a livelihood and
the right to an education will include a greater
amount of the means of living and greater oppor-
tunities of self-improvement in the cases of those
who have greater needs and greater capacities. But
in every case the natural rights of the individual
will embrace a certain minimum of the goods to
which these rights refer, which minimum is de-
termined by the reasonable needs of personality.
The rights that any person will possess in excess of
this minimum will depend upon a variety of cir-
cumstances, individual and social. Hence, instead

* For an explanation of the distinction between abstract or
specific and concrete or individual equality, see, Taparelli,
"Droit nature!," nos. 354-363, and Naudet, "La democratie,"
ch. XV.

47

A LIVING WAGE

of saying that the natural rights of all men are
equal in the abstract but not in the concrete, it
would perhaps be more correct, or at least less mis-
leading, to describe them as equal in kind, number
and sacredness, and in extension relatively to their
particular subjects; but not in quantity nor in abso-
lute content.

Such in bare outline is the theory of the character,
purpose, and extent of natural rights. Do they
really exist? Is the individual really endowed with
moral prerogatives, inviolable claims, in virtue of
which it is wrong, for instance, to take from him,
so long as he is innocent of crime, his life or his
liberty? Whence comes the validity and sacredness
of these claims ? The answers to these questions have
already been briefly indicated in the statement of
the end for which the claims exist. Natural rights
are necessary means of right and reasonable living.
They are essential to the welfare of a human being,
a person. They exist and are sacred and inviolable
because the welfare of the person exists — as a fact
of the ideal order — and is a sacred and inviolable
thing. It was Cicero who wrote: "Fine in phil-
osophia constitute, constituta sunt omnia," In
problems of philosophy, when we have established
the end we have established all things else. Let us
look more deeply, then, into the scope and character
of this end to which natural rights are but means.

Right and reasonable life, the welfare of the per-
son, consist in the development of man's personality
through the harmonious and properly ordered ex-
ercise of his faculties. He should subordinate his

JUSTIFICATION OF RIGHTS

sense- faculties to his rational faculties ; exercise his
rational faculties consistently with the claims of his
Creator and the reasonable demands of his fellows;
and seek the goods that minister to the senses and
the selfish promptings of the spirit in subordination
to the higher goods, namely, those of the intellect
and of the disinterested will. In a word, the su-
preme earthly goal of conduct is to know in the
highest degree the best that is to be known, and to
love in the highest degree the best that is to be
loved. These highest objects of knowledge and
love are God, and, in proportion to the degrees of
excellence that they possess, His creatures. To
prove that these moral and spiritual values are facts,
we have only to appeal to the consciousness of any
normally constituted human being. The average
man has an abiding conviction that the rational
faculties are higher, nobler, more excellent, of great-
er intrinsic worth than the sense- faculties ; that
consequently the goods of the mind are to be pre-
ferred to those of the senses; and that among the
activities of the rational powers those dictated by
disinterested love are intrinsically better than those
which make for selfishness. These primary and
general moral intuitions produce in the. mind of the
person who heeds them the conviction that it is not
only reasonable but obligatory for him to pursue the
path of conduct thus dimly outlined. The imme-
diate objective basis of this obligation is the intrin-
sic superiority of the higher faculties, the infinite
worth of God, and the essential sacredness of human
personality. The ultimate source of the obligation
4 49

A LIVING WAGE

is the Will of God ; just as the ultimate source of the
distinction between the higher and lower faculties,
activities, and goods is the Divine Essence; and
just as the ultimate source of the intuitions by which
we perceive these distinctions is the Divine Reason.

Since, therefore, the individual is obliged to live
a moral and reasonable life in the manner just
described, the means to this end, i. e., natural rights,
are so necessary and so sacred that all other persons
than the one in whom they reside are morally re-
strained from interfering with or ignoring them.
The dignity of personality imposes upon the individ-
ual the duty of self-perfection ; he cannot fulfil this
duty adequately unless he is endowed with natural
rights. Such is the immediate basis of natural rights
and the proximate source of their sacredness ; their
ultimate source is to be found in the Reason and
Will of God, who has decreed that men shall
pursue self-perfection and that they shall not arbi-
trarily deprive one another of the means essential
to this purpose.

This method of basing the individual's natural
rights upon his duties is perhaps the one most com-
monly employed by those writers who hold indi-
vidual perfection to be the immediate end and rule
of conduct. According to another mode of reason-
ing, they rest, not upon the duties of their possessor,
but upon those duties of other men toward him which
are called juridical, that is, the "other-regarding"
duties that cover goods which in the strict sense
belong to him as his own. Thus the fulfilment of
lawful contracts is a juridical duty, while assisting

SO

JUSTIFICATION OF RIGHTS

the needy is only a duty of charity. All juridical
duties may be summed up in the command, "thou
shalt not arbitrarily interfere with the external liber-
ty of thy fellow man," for external liberty comprises
all those opportunities of activity, acquisition and
possession that are essential to the pursuit of reason-
able self-perfection. Corresponding to and implied
by these juridical duties in one man are those moral
prerogatives in other men that we call natural rights.
The foundation and source of these duties is that
precept of the natural law (understanding by natural
law that portion of God's eternal law which applies
to human conduct and is written in the human rea-
son) which enjoins men to respect the dignity of
human personality in one another, i

This line of argument, however, suggests that not
even the juridical duties of men are formally neces-
sary as a basis and justification of natural rights.
These duties are, indeed, imposed upon man by the
natural law, but the reason why this particular pre-
cept of the law exists, as well as the reason that con-
strains us to believe that it does exist, is to be found
in the intrinsic and inviolable worth of the individ-
ual. That is the ultimate basis — on this side of God
— of both juridical duties and natural rights. To
prove the existence of the latter, it seems, therefore,
logically sufficient to show that because of his in-
trinsic dignity a person is morally privileged to pur-
sue self-perfection, and his fellows are morally
restrained from hindering his exercise of the priv-

* Cf. "Philosophia Moralis," by Julius Costa-Rosetti, 2d
edition, thesis 114.

SI

A LIVING WAGE

ilege. Natural rights may be likened to the legal
right by which a man holds a piece of land that he
has bought from the State. His claim thereto is
founded neither upon his duty to support his family
(to which end the produce of the land may be as-
sumed to be the necessary means) nor upon the
obligation which binds his neighbors to leave him
in undisturbed possession. Similarly, the indi-
vidual's natural rights may be regarded as inde-
pendent both of his own duties and of the duties
which these rights occasion in his fellows. ^

Finally, natural rights can be logically defended
on the principles of what may be called intuitive
hedonism. There are men who maintain that the
supreme end and rule of conduct is universal happi-
ness. By this phrase they mean, not "the greatest
happiness of the greatest number," nor the general
happiness of the group or of society, — all of which
are equivalent in the concrete to the happiness of the
majority — but the happiness of each and every hu-
man being. They insist that, since human happiness
is the good of a person, it has intrinsic zvorth, is in
itself a sacred thing, and that all individuals have,
therefore, essentially equal claims to the opportunity
of pursuing it. This doctrine is hedonistic, inas-
much as it makes happiness the ultimate end, and
intuitive, inasmuch as it postulates not merely the
desirableness of personal happiness, but the intrinsic
worth of all human happiness. The late Professor

^ Cf. "The Theory of Morals," by Paul Janet, Book II, ch,
IV, in which the author defends a doctrine very similar to the
one just outlined, although he strangely calls a right a "respon-
sibility."

52

JUSTIFICATION OF RIGHTS

Sidgwick held substantially this view, although
he admitted that it contains an inherent contradic-
tion. 1 For if the intuition of "rational benevo-
lence" be acknowledged as logically sufficient to com-
pel me to forego my own happiness for the greater
happiness of others, then the ultimate end, rule and
determinant of right action is no longer my happi-
ness— which is the only "desirable consciousness"
that can have any meaning for me — but conformity
to the dictates of reason. In other words, reason
assures me that human happiness is valuable per se,
while all my aspirations and experiences tell me
happiness is a good only in so far as it provides
me with agreeable states of consciousness. If, how-
ever, the general principle be admitted in spite of
its inherent weakness, a system of natural rights
can be logically deduced therefrom.

All of these methods, therefore, posit as the ulti-
mate earthly basis of the individual's natural rights
the inherent sacredness of his personality. This is
true even of the argument which derives rights from
the duty of perfecting one's self; for this duty is
itself founded upon the intrinsic worth of the person,
specifically of his higher faculties. Hence we find
that those who reject the doctrine of natural rights,
and who reason logically, reject likewise the princi-
ple of the essential and absolute dignity of every
human being. They either deny that anything in the
universe possesses intrinsic worth, or assert that
social welfare is the highest good. To the former

* See his "Methods of Ethics," Book III, chapters XIII and
XIV ; and Book IV, concluding chapter, 6th ed.

Al LIVING WAGE

class belong the believers in egoistic hedonism ; to the
latter, the social utilitarians and the Hegelians.

For those who maintain that the supreme end of
life and rule of conduct is one's own happiness,
there can, of course, be no such thing as a right in
the moral sense of the term. There is no sacred-
ness, no intrinsic worth, no obligation-compelling
force in either the concept or the fact of happiness
unqualified and divorced from all consideration of
the dignity of personality. The person who refuses
to seek his own happiness can be condemned as un-
wise but not as immoral. And if he is not, in any
true sense of the word, under moral obligation to pro-
cure happiness for himself, neither is he bound by any
sort of duty to respect or refrain from hindering the
happiness of others. As there is no sacredness in
the end — happiness — and none in the persons pur-
suing it, so there can be no sacredness in the means —
those opportunities of activity that we call rights —
and no obligation to respect them. In such a system
individual rights have neither logical foundation
nor intelligible meaning. Again, if personal happi-
ness be the ultimate aim and criterion of reasonable
conduct it is altogether fitting and reasonable that
each man should interpret happiness in his own way,
and strive to obtain it by whatever means seem to
him best, regardless of such unreasonable and un-
founded restraints as rights and obligations.

This purely egoistic hedonism seems to be com-
pletely and consistently accepted by only a very small
minority of the world's thinkers. Even with them
it is a merely speculative belief. In practice they

54

JUSTIFICATION OF RIGHTS

reject or at least modify it, in common with the
overwhelming majority of the men and women who
live outside of lunatic asylums. A formal refuta-
tion of it in the interest of the doctrine of natural
rights is, therefore, unnecessary. Of much greater
importance for our contention is the theory that all
rights are positive, that is, derived from society, and
conferred upon the individual primarily for the
benefit of society and only secondarily for the sake
of the individual. ^ Individual rights are valid in

* In substance this theory seems to be held by a majority
of the non-Catholics of our time who write on justice and
political philosophy. Not all state it in the same language nor
restrict the concrete rights of the individual to the same extent,
but all accept the principle that the individual has no right
which society may not in certain contingencies annul for its
own welfare. The sources of the theory are chiefly: (i)
writers who opposed the doctrines of the French Revolution,
such as, Edmund Burke in "Reflections on the Revolution in
France," and Joseph de Maistre in "Essai sur le principe
generateur des constitutions politiques" ; (2) juristic writers
who, in opposition to the Eigheenth century teaching on
natural rights, endeavored to place all rights on a basis of
historical facts and development, the most prominent of whom
were F. C. de Savigny in "System des roemischen Rechts,"
and F. C. Stahl in "Philosophic des Rechts" ; (3) the Hegelian
conception of the State as the highest manifestation of the
Universal Reason and Will, tne source of all rights, and the
absolute end to which the individual must subordinate his
particular aims and activity ; see Hegel's "Grundlinien der
Philosophic des Rechts," and Lasson's "System der Rechts-
philosophic" ; (4) and finally, the doctrine of evolutionist
utilitarianism, which emphasizes the importance of race pro-
gress at the expense of the individual.

Some indications of common points in the last two sources
will be found in chapter H of Ritchie's "Darwin and Hegel,"
while recent statements of the general positivistic theory of
rights are contained in "Natural Rights," by the same author,
in Hobson's "Social Problem," and in Willoughby's "Spcial
Justice." Good presentations of the doctrine of natural rights
defended in this chapter are made by Taparelli, "Droit
naturel," and Meyer, "Institutiones Juris Naturalis." Finally
Hegel's general concept of personality is successfully attacked

55

A LIVING WAGE

so far as they do not hinder the social weal. "By
himself," says Mackenzie, "a man has no right to
anything whatever. He is a part of the social whole ;
and he has a right only to that which it is for the
good of the whole that he should have." ^ In this
view the social organism becomes an end in itself;
and its good becomes the final goal and rule of
human conduct. Now society is, indeed, something
more than an abstraction, something more than the
sum of its component individuals. And its function
is not simply to guarantee equal liberty to all its
members, in the sense of Immanuel Kant and Her-
bert Spencer. It is a real entity, a moral body, an
organism, whose purpose is to safeguard the rights
and promote to a reasonable degree the welfare of
every one of its members. It is an organism only
by analogy, however ; not literally or physically. It
is an organism inasmuch as its members are mutu-
ally dependent, and have diverse functions; inas-
much as it persists amid continuous changes in its
membership, and will retain its identity after all its
present members shall have perished ; and inasmuch
as its health is determined by the health of its mem-
bers, and in turn reacts upon the latter. When this
much has been said the analogy between society and
a biological organism is about exhausted. Society
is not an organism in the sense that it is a finality.
Its members do not exist and function for its wel-
fare; they possess intrinsic worth and sacredness.

in Andrew Seth's "Hegelianism and Personality," especially
on pp. 67-69 and in the concluding chapter.
^ "A Manual of Ethics," p. 296.

56

JUSTIFICATION OF RIGHTS

Hence it is not an organism in which the individual's
personaHty is merged and lost, like the branch in the
tree, to use the illustration of Hegel. Society has,
indeed, rights that are distinct from the rights of
the individuals composing it, and its scope and aims
reach beyond the welfare of the men and women that
live in it at any given time. It has the right, for
example, to make war, which the individual has not ;
and to prevent the ruthless destruction of forests,
which prohibition may be contrary to the interests
and wishes of its present members. Nevertheless,
every right that society possesses, every act that it
performs, every assertion that it makes of its legiti-
mate power over individuals, is ultimately for the
sake of individuals. It cannot otherwise be justi-
fied, for it is not an end in itself.

Let us concede for the moment that society
exists for its own sake, is its own highest good. All
its powers, prerogatives and activities will be natur-
ally used as a means to this end. Whenever individ-
uals, however innocent of wrong doing, impede
society's progress they are to be relentlessly blotted
out of existence. Let us suppose that as a result of
this social selection the general level of the race is
much higher than it would have been had regard
been paid to the "superstition" of natural rights.
Society has been treated as an end in itself, and the
result is a more excellent society.

It must be evident that the individuals who have
been removed to bring about this result could not
reasonably have been expected to make the sacri-
fice willingly. They could not have been satisfied

57

A LIVING WAGE

to efface themselves for the sake of society as dis-
tinct from its members, since this would be to die
for an abstraction. Nor is it likely that any con-
siderable number of them were willing to forego
existence in order that the individuals who were left
behind might enjoy a more complete existence in
the improved society; for the real meaning of this
situation is that the former have been used as mere
instruments to the welfare of the latter. It is not
reasonable to expect men to devote themselves com-
pletely to any other end than their own highest
good, and a superior society cannot be the highest
good for those who must be annihilated as a condi-
tion of its realization. They will very naturally pre-
fer to run the risk of securing their own welfare in
a less perfect social organization. There is no duty
constraining one section of the community — not
simply to risk their lives, as in a just war — but to
submit to be killed by the social authority, in order
that the surviving citizens may have the benefit of a
more efficient State. The same statement may be
made concerning any other of the individual's
natural and essential rights. And if the individuals
whose rights are treated as non-existent are neither
willing nor bound by moral obligation to make the
sacrifice, the State has certainly no right, no moral
power, to treat them as a means pure and simple to
the welfare of those of its members who are per-
mitted to survive. For, juggle as we will with the
terms "social utility" and "social welfare," talk as
obscurely as we may about regarding the individual
from the viewpoint of society, the true meaning of

58

JUSTIFICATION OF RIGHTS

the assertion that the rights of the individual are
derived from and wholly subordinate to society, is
that the lives of those who are less useful to society
are essentially inferior to the lives of those who are
more useful. And not until those who reject natur-
al rights have succeeded in proving that some human
lives are less sacred, have less intrinsic worth, stand
on a lower grade of being than others, can they in-
dulge the hope of winning over any considerable
number of thinkers to the contention that the in-
dividual— even the poorest and lowliest person that
breathes — has no rights that are indestructible by
society.

The positivist theory of rights becomes more
formidable, at least at first sight, when it is stated
in terms of Hegelianism, The question is no longer
one between the relative interests and importance of
the stronger, wiser and more virtuous citizens on
the one hand, and of the weaker, less intelligent and
more vicious on the other. Organized society, or
the State, is in this system regarded as a good in
itself, the highest manifestation of the Universal
Reason, which is the only final reality. The all-
important consideration, then, is to see that this
highest embodiment of the Universal Reason or
World-Spirit called the State, shall reach the fullest
possible development. Compared with this purpose,
the welfare of individuals, who are merely particular
and imperfect realizations of the one great reality,
is insignificant. Their importance is analogous to
that of the individual trees in a beautiful grove : the
totality called the grove is the supreme end, to which

59

A LIVING WAGE

the existence and condition of any particular tree is
entirely subordinate. The rights of the individual
are, therefore, derived from the State and intended
for the greater glory of the State. The late Profes-
sor Ritchie, one of the ablest of the Hegelians who
wrote in English, describes the rights and dignity
of the human person thus : "Every human being may
claim a right to be considered as such, because he
potentially shares in the consciousness of the Uni-
versal Reason."! Each individual is, as it were, a re-
ceptacle of the Universal Reason, and derives there-
from all his worth and sacredness. When, conse-
quently, the life or liberty of the individual begins
to be an obstacle to the activity or unfolding of the
Universal Reason, whenever the interests of the
Universal Reason demand that any given individual
should cease to embody it, he may lawfully be put to
death, just as a diseased limb may be severed from
the body, or a leaking pot be consigned to the scrap
heap. If the Pantheistic basis of this deification of
the State be accepted the theory of rights reared
upon it is entirely logical. It may well be doubted,
however, whether this blind, impersonal entity known
as the Universal Reason seems to any considerable
number of persons to have the moral authority re-
quisite to oblige them to surrender their particular
existence for Its aggrandizement. And of the few
who may recognize the supreme rights of the Uni-
versal Reason, not all will acknowledge that Its
loftiest manifestation is to be found in the very falli-
ble and very imperfect State in which they happen

* "Natural Rights," pp. 96, 97.
60

JUSTIFICATION OF RIGHTS

to live. An attempt to refute the metaph3'sical as-
sumptions underlying the Hegelian theory of rights
is, consequently, not much needed at this time.

One of the most frequent of the popular arguments
against natural rights runs thus : All rights come in-
to existence, become necessary, and obtain adequate
protection only in society; hence they are derived
from society, exist for a social end, and should be
exercised chiefly for the social welfare. This pre-
sentation is vitiated by an incorrect analysis and by
unwarranted inferences. Not all of man's rights
require a social organization, or even social contact
of any kind, in order that they should become
existent. All that is necessary is that two men be
alive at the same time. They may be thousands of
miles apart, may not even know of each other's ex-
istence, yet each will possess in full validity such
natural rights as those of life, liberty and property,
and will be morally restrained from hindering his
fellow in the reasonable exercise of these rights.
As to the second contention, it is true that rights are
not needed until men come into some form of social
intercourse; for a right means the moral power of
restraining others from interfering with one's per-
sonal goods, and if there is no one near enough to
interfere the moral restraint is unnecessary and im-
practicable ; but this does not prove that rights are
created by society, any more than the fact that even-
ing dress is worn only at certain "functions" proves
that this form of apparel is created by or for the
"functions." The clothes are intended for the in-
dividual wearers on certain occasions. In like man-

6i

A LIVING WAGE

ner, the individual's rights have for their primary
purpose his own welfare in society. Finally, the
fact that a man's rights can be sufficiently protected
only in civil society is not a reason why they should
be entirely subordinated to the ends of society, any
more than the employer's dependence upon his em-
ployees puts him under obligation to turn over to
them all his profits.

Academic opposition to the doctrine of natural
rights is directed not so much against the moderate
conception of them that has always prevailed in
Catholic ethical teaching, as against the exaggerated
and anti-social form in which they were proclaimed
by the political philosophers of France, and even by
some of those of England and America, in the latter
half of the Eighteenth century. The Catholic view,
which is the one defended in this chapter, is, as al-
ready noted, that the individual's natural rights are
derived from and determined by his nature, that is
to say, his essential constitution, relations and end.
They are also said to proceed from the natural law,
which is simply that portion of God's eternal law
that applies to actions of human beings. The natur-
al law is so expressed in man's nature that its general
precepts may readily be known, partly by intuition
and partly by analyzing man's faculties, tendencies
and destiny. In the view of the Revolutionary
philosophers, however, "nature" and "natural" re-
ferred not to what is essential and permanent in
man, but to that which is primitive and unconven-
tional. Hence they laid more stress on the "state

62

JUSTIFICATION OF RIGHTS

of nature" than on the "law of nature." ^ The
natural law was merely that very simple and very
primitive system of rules that would suffice for the
state of nature, in which political restraints would
be unknown, or at least reduced to a minimum. As
the late Professor Ritchie has well said: "To the
Thomist- the law of nature is an ideal for human
law ; to the Rousseauist it is an ideal to be reached by
getting rid of human law altogether." ^ In the mind
of the Revolutionist, therefore, to re-establish the law
of nature meant to shake off the cumbersome and ob-
structive political regulations of the day, and get
back to the simple state of nature, the semi-anarchic-
al conditions of primitive times. This was, of
course, a very inadequate interpretation of man's
nature and of the natural law. No such "state of
nature" ever existed or ever could exist compatibly
with civilization. No valid conclusion regarding the
individual's liberties, duties or rights could be de-
duced from his position and relations in this imagin-
ary and irrational existence. Nevertheless, upon it
were based and by it were measured men's natural
rights in the Revolutionary system. As a conse-
quence, the rights of the individual were exaggerated
and the rights of society minimized. In practice
this juristic liberalism has meant, and always will
mean, that the State allows to the strong the legal
right and power to oppress the weak. A good ex-
ample of the evil is to be found in the results of the
economic policy of laisses-faire. It is no wonder

^ Cf. Bonar, "Philosophy and Political Economy," p. i86.

* And the Catholic philosopher generally.

* "Natural Rights," p. 43.

63

A LIVING WAGE

that there has been a reaction against this pernicious,
anti-social and really unnatural theory of natural
rights.

The doctrine of natural rights outlined in the fore-
going pages holds, then, a middle ground between
the Revolutionary and the positivistic theories of
the origin and extent of the rights of the individual.
It insists that the individual is endowed by nature,
or rather, by God, with the rights that are requisite
to a reasonable development of his personality, and
that these rights are, within due limits, sacred against
the power even of the State ; but it insists that no in-
dividual's rights extend so far as to prevent the State
from adjusting the conflicting claims of individuals
and safeguarding the just welfare of all its citizens..
In other words, man's natural rights must not be sc
wideiy interpreted that the strong, and the cunning,
and the unscrupulous will be able, under the pretext
of individual liberty, to exploit and overreach the
weak, and simple, and honest majority. The formula
that correctly describes the limits of individual
rights is not the one enounced by Kant and Fichte,
namely, that a person has a right to do everything
that does not interfere with the equal liberty of oth-
ers. ^ Interpreted in one way, this formula is
utterly incapable of application, since the doing of
an action by one man means the limitation to that
degree of the liberty of all other men. Understood
in a completely subjective sense, it would justify
and legalize theft, adultery and murder; for I may

^ Seft Kant's "Metaphysik der Sitten," section C, and
Fichte's "Science of Rights," p. i6i, Kroeger's translation.

64

JUSTIFICATION OF RIGHTS

claim the right to steal if I am willing that others
should enjoy the same liberty. The true formula
is, that the individual has a right to all things that
are essential to the reasonable development of his
personality, consistently with the rights of others
and the complete observance of the moral law.
Where this rule is enforced the rights of all indi-
viduals, and of society as well, are amply and reason-
ably protected. On the other hand, if the indi-
vidual's rights are given a narrower interpretation,
if on any plea of public welfare they are treated by
the State as non-existent, there is an end to the dig-
nity of personality and the sacredness of human
life. Man becomes merely an instrument of the
State's aggrandizement, instead of the final end of
its solicitude and the justification of its existence.
If all rights are derived from the State, and deter-
mined by the needs of the State, the laborer has no
such thing as a natural right to a Living Wage, nor
any kind of right to any measure of wages, except
in so far as the community would thereby be benefit-
ed. President Hadley tells us that some workers
are more profitable at a low wage than at a high
one, that the "economy of high wages" is not a
universal law. "There are some men whose maxi-
mum efficiency per unit of food is obtained with
small consumption and small output. These go into
lines requiring neither exceptional strength nor ex-
ceptional skill, and remain poor because the best
commercial economy in such lines is obtained by a
combination of low output and low consumption." ^

^"Economics," section 363.
5 65

A LIVING WAGE

Those who would measure the rights of the individ-
ual by the social weal must logically conclude that
whenever "the best commercial economy" is secured
by "low consumption," in other words, by low wages,
the underpaid worker, let him be never so cruelly
"sweated," is not treated unjustly and has no right
to a larger remuneration. Hence the importance
of the doctrine of rights to the subject of this vol-
ume ; for it cannot be shown that every laborer has
an ethical claim to a Living Wage unless the teach-
ing of Christianity be accepted, to-wit : "That every
individual by virtue of his eternal destination is at
the core somewhat holy and indestructible ; that the
smallest part has a value of its own, and not merely
because it is part of a whole : that every man is to be
regarded by the community, never as a mere instru-
ment, but also as an end." ^

* Gierke, "Political Theories of the Middle Age," p. 82.

66

CHAPTER IV

The Right to Subsistence and the Right to a
Decent Livelihood

The right to a Living Wage is derived from the right
to live from the bounty of the earth. The latter right ac-
knowledged by most nations and insisted upon by Christi-
anity. It is evident from a view of man's nature and his
relation to the earth. It is superior to and limits the right
of private ownership. Meaning of a decent livelihood. Its
rational basis is the sacredness of personality. Men have
not natural rights to equal amounts of goods ; for they are
unequal both in individual needs and productive powers.
Nor rights to equal satisfaction of the totality of their
needs. Circumstances by which the right to a decent liveli-
hood is conditioned.

According to the argument made in the last chap-
ter, the source of natural rights is the dignity of the
human person, while their scope is determined by
the person's essential needs. A man's natural rights
are as many and as extensive as are the liberties,
opportunities and possessions that are required for
the reasonable maintenance and development of his
personality. They may all be reduced to the right
to a reasonable amount of external liberty of action.
Some of them, for instance, the rij^ht to live and the
right to marry, are original and primary, mhering

(>7

A LIVING WAGE

in all persons of whatever condition ; others are de-
rived and secondary, occasioned and determined by
the particular circumstances of particular persons.
To the latter class belongs the right to a Living
Wage. It is not an original and universal right;
for the receiving of wages supposes that form of in-
dustrial organization known as the wage system,
which has not always existed and is not essential to
human welfare. Even to-day there are millions of
men who get their living otherwise than by wages,
and who, therefore, have no juridical title to wages
of any kind or amount. The right to a Living Wage
is evidently a derived right which is measured and
determined by existing social and industrial institu-
tions.

The primary natural right from which the right
to a Living Wage is deduced, is the right to subsist
upon the bounty of the earth. All people have given
more or less definite adhesion to the truth that the
earth is the common heritage of all the children of
men. Emil de Laveleye and Sir Henry Maine tell
us that, "originally the soil belonged in common to
communities of kinsmen"; and Clifife-Leslie, speak-
ing of the wild herbs, fruits, berries and roots which
were the earliest forms of property, says : "Individ-
uals did not regard these as their own absolute
property, but as part of the common fund of the
community." ^ Whatever objections may lie in the
way of the theory of primitive communism in land,
the facts at our disposal seem to indicate that

' Introduction to Laveleye's "Primitive Property," pp. vi,
vii. Cf. Wallace's " Russia."

68

RIGHT TO SUBSISTENCE

scarcely any community has regarded as thieves
those of its own members who seized their neighbor's
goods as a last resource against starvation. This
is especially true of the nations that have adopted
the moral teachings of Christianity. In the early
centuries of the Christian era the task of providing
for the poor and needy was accepted and recognized
by the bishops and secular clergy, the monasteries
and other religious institutions, as an obligation of
legal justice; in modern times it is most frequently
discharged through the legislation known as poor
laws. Underlying these various practices and in-
stitutions is the Christian conviction that every hu-
man being has not only a claim in charity, but a
strict right to as much of the wealth of the com-
munity as is necessary to maintain his life. Such
was the doctrine of the early Fathers of the Church,
and such has been the doctrine of all her authorita-
tive teachers down to the present hour. The teach-
ing of Basil in the East and Ambrose in the West
may be taken as representing the mind of all the
Fathers. The former tells the rich man that the
superfluous bread, shoes and clothes in his posses-
sion belong to his hungry and naked neighbors,
while the latter declares that the man of wealth who
gives to the poor is not bestowing an alms but pay-
ing a debt. ^ The greatest of the theologians, St.
Thomas Aquinas, maintained that the man in ex-
treme need who had no other resource was justified
in supplying his necessities from the goods of his
^ For a fairly good account of the attitude of the Fathers
toward private property, see Capart, "La propriete individuelle
et le collectivisme."

69

A LIVING WAGE

neighbor, and that this would not, properly speaking,
be theft. ^ Again, he says it is well that property
should be owned privately, but that the use of it
should be common, so that all persons may be sus-
tained out of its abundance. ^ In this statement we
have undoubtedly an echo and development of the
saying of Aristotle that, "it is best to make property
private but to have the use of it common." ^

This claim of the individual to a livelihood, which
seems to be allowed by the moral convictions of all
peoples, and which is explicitly asserted in the
Christian teaching, is obviously in accord with the
dictates of reason. Since all persons are of equal
intrinsic worth, the maintenance of life is of equal
intrinsic importance in all. Relatively to his fellows,
every man is an end in himself. No man can rea-
sonably say to his neighbors : "My life is superior to
yours, more sacred than yours, and your faculties
and lives ought to be treated as mere means to my
welfare." Nor can any man truthfully assert that
there is anything in the designs of God, in his own
nature, or in the nature of the earth that would jus-
tify him in maintaining that his right to the earth's
material resources is superior to that of his fellows.
On the one hand, then, we have the fact that all per-
sons are of equal dignity and their lives of equal
intrinsic importance ; on the other hand, we see that
all men stand on the same footing in relation to the
common bounty of earth. It follows, therefore,
that the right of access to the material means of liv-

*"Summa Theologica," 2a. 2ae., q. 66, a. 7.

'Ibid, a. 2.

•"Politics," Book II, ch. V.

70

RIGHT TO SUBSISTENCE

ing is as important and as valid in one man as in
another. The man who is not in himself in extreme
need cannot rightfully debar his perishing fellow
man from the goods that are indispensable to the
preservation of life.

What becomes, according to this doctrine, of the
right of private property, and of the recognized
titles thereto, such as occupation, inheritance, labor,
acquisition by contract, etc. ? Suppose the starving
man wishes to take some of the bread that the honest
mechanic has bought with his hard earned wages !
The latter may meet the man in distress with the
statement : "Yes, I concede that you have by nature,
by the fact that you are a human being, the right to
acquire and use property and, in general, to live
upon the fruits of the earth ; but my purchase has
given me a particular claim to this particular bread,
a specific and precise right against which your
generic and vague right cannot prevail." The
answer to this contention is simple. All the titles
of private ownership are merely reasons or causes
why a person can validly lay claim to a particular
piece or article of private property. They show
why the good in question belongs to the present
claimant rather than to any other owner; but they do
not prove the validity of private property as an in-
stitution. Private ownership of the earth's resources
is right and reasonable not for its own sake — which
would be absurd — but because it enables men to sup-
ply their wants more satisfactorily than would be
possible in a regime of common property. Hu-
man needs constitute the primary title both of com-

71

A LIVING WAGE

mon and of private ownership. Private property
is morally legitimate because it is the method that
best enables man to realize his natural right to use
the gifts of material nature for the development of
his personality. It is, therefore, merely a means,
and its scope is determined and limited by the end
which it promotes, and which is its sole justification.
The private right of any and every individual must
be interpreted consistently with the common rights
of all. When a private owner encroaches upon the
latter he cannot justify his conduct by an appeal to
the authority of his private right ; for this is a mere
means to the right of use, and his right of use ceases
where the like right of his neighbor begins. Hence
a man's right to a superfluous loaf which is his by
a title of private ownership does not absolve him
from the crime of injustice when he withholds it
from his starving fellow man. In acting thus he
treats a trifling want of his own, namely, the desire
to continue in possession of that loaf, as a thing of
greater worth than his neighbor's life. He uses the
common bounty of nature to satisfy an unimportant
want at the expense of an essential want in a being
whose life is as sacred and as valuable as his own.
As this use of goods is unreasonable, so is the means
by which it is accomplished, namely, an undue ex-
tension and unwarranted interpretation of the right
of private property.

So much for the right to subsistence, to a bare
livelihood. By a decent livelihood is meant that
amount of the necessities and comforts of life that is
in keeping with the dignity of a human being. It

72

RIGHT TO SUBSISTENCE

has no precise relation to the conventional stand-
ard of living that may prevail w^ithin any social or
industrial class, but describes rather that minimum
of conditions which the average person of a given
age or sex must enjoy in order to live as a human
being should live. It means, in short, that smallest
amount of subsistence goods which is reasonable,
becoming, appropriate to the dignity of a person.
The content of this right will be stated in detail here-
after ■; at present let us say that if a man is to live a
becoming life he must have the means, not merely
to secure himself against death by starvation and
exposure, but to maintain himself in a reasonable
degree of comfort. He is to live as a man, not as
an animal. He must have food, clothing and shelt-
er. He must have opportunity to develop within
reasonable limits all his faculties, physical, intellec-
tual, moral and spiritual. The rational ground of
this right is the same as that of the right to subsist-
ence. It is the dignity and essential needs of the
person. Those means and opportunities that have
just been described as a decent livelihood are the
minimum conditions of right and reasonable living,
since without them man cannot attain to that ex-
ercise of his faculties and that development of his
personality that makes his life worthy of a human
being. When he is compelled to live on less than
this minimum he is treated as somewhat less than a
man. If it be asked. What proof can be given that a
person really possesses this right to a decent liveli-
hood? the answer must be that proof in the strict
sense is impossible. If it is not self-evident, none

73

A LIVING WAGE

of man's natural rights are self-evident, and the
dignity of personality is a delusion. All that a de-
fender of any of these rights can do is to offer what
Mill called ''considerations which induce the mind
to accept." The only argument that can be adduced
for the right to live is that the sacredness of person-
ality is violated when one man uses the life of an-
other as a mere means to his own welfare. Simi-
larly a man's dignity is outraged when he is deprived
of the opportunity to live a reasonable life, in order
that some other man or men may enjoy the super-
fluities of life. A decent livelihood is just as truly
an essential need of man, is just as absolutely de-
manded by his intrinsic dignity, as subsistence, or
security of life and limb. In all these rights the
vital and ultimate consideration is the intrinsic worth
of the person. If this be ignored, if the principle
that every man is an end in himself be rejected in
the case of the claim to a decent livelihood, it can
logically be ignored where life itself is at stake ; for
the difference between these rights and between the
needs to which they respond is one of degree not of
kind. Now, since a reasonable life and the reason-
able development of personality are of equal intrinsic
importance in all human beings, the fruits of the
earth, the common heritage, ought to be distributed
in such a way that this end will be realized. Conse-
quently when any person is hindered from obtaining
access on reasonable terms to this minimum of ma-
terial goods his dignity and rights are violated, and
some other man or men, or some social institution,
has committed an act of injustice.

74

RIGHT TO SUBSISTENCE

Why content ourselves, it may be asked, with the
assertion that men have equal rights merely to a
decent livelihood? Since the earth was created for
all, and since men are equal in personal dignity,
have they not a natural right to equal amounts of the
products of the earth? The first answer to these
questions consists in an appeal to that very consider-
ation of equal justice which, superficially regarded,
seems to demand an equal division. Although men
are equal in personal dignity, they are unequal in
their individual powers and needs. Equal generic-
ally, they are unequal individually. The quantity
that would constitute a decent livelihood, or any
other given level of living, for one man, would mean
now more and now less than this level in the case of
other men. So that even if the ideal of distributive
justice were that social condition in which all men
would have the requisites of precisely equal degrees
of life and development, the quantity necessary for
this purpose would vary according to the varying
constitutions and peculiarities of the individuals.
All that any man could justly demand would be the
amount that made this degree of life possible for
him. With regard to their content, therefore, the
equality of rights is proportional not arithmetical.

Another objection to the method of absolute equal-
ity in distribution arises out of the principle of pro-
ductivity. The conviction is well-nigh universal
that a man has a right to all that he produces. Any
one not in extreme need who seizes the results of
another's labor is everywhere regarded as a robber
or a thief. And this judgment seems to be entirely

75

A LIVING WAGE

correct. Certainly it is true of those cases in which
the producer, using materials which are his by some
valid title of ownership, turns out a product unassist-
ed. Upon this product his, and only his, personality
is impressed, and it is difficult to see on what ground,
save that of dire need, any portion of it can be
claimed by anyone else. The same principle would
seem to hold in a lesser degree with regard to the
joint product of a number of associated workers
whose productive contributions have been unequal.
Those who have produced most are, it would seem,
entitled to the largest share of the product. It is not
necessary, nor even proper, that they should be
awarded in full proportion to their productivity — for
the reasonable needs and the efforts or sacrifices of
the other workers constitute superior titles — but they
ought to receive something more than the less effi-
cient contributors. Mr. John A. Hobson says that so-
ciety must, as a matter of expediency, recognize in its
members some kind of right to "all that portion of a
product necessary to evoke the effort to produce it."^
It is true that society will do well to pay exceptional
rewards in order to obtain exceptional services, but
this necessity under which society labors does not of
itself confer upon the doers of such services a right
to unusual remuneration, any more than the condi-
tions which compel a weaker nation to pay tribute
to a stronger create a right in the latter to receive
and retain such payments. Social expediency is
frequently nothing more than forced toleration of
something essentially evil. Independently, how-
^The Social Problem, pp. 105, 106.
76

RIGHT TO SUBSISTENCE

ever, of the attitude of society, superior productive
power does seem to give rise to some sort of title to
superior rewards, and therefore to refute the claims
of arithmetical equality.

But if man's needs constitute the primary and most
urgent title of ownership, and should be taken as
the sole rule of distribution up to the point where
all men are provided with a decent livelihood, why
not apply the same principle to all the needs that
clamor for satisfaction and all the goods that are to
be distributed? Since men are of equal worth, does
not ideal justice require that they should be enabled
to supply the totality of their needs in equal degrees ?
Is it just that one man smoke cigars, while his
neighbor, with the same human nature and the
same tastes, is compelled to content himself with
cheap tobacco and a clay pipe ? One answer to these
questions is found in the claims of the principle of
productivity as outlined in the preceding paragraph.
The man who produces more wealth or other forms
of social utility than his fellow producers acquires
some kind of right to a greater reward, independ-
ently of the extent or intensity of his needs. Again,
some of the producers make greater efforts and
greater sacrifices than others ; and a large part of
the world's productive resources is already held by
legitimate titles of private ownership, such as oc-
cupation, inheritance and contract. Superior sac-
rifices undergone in the production of social utilities
create a claim to superior remuneration; and the
recognized titles of private ownership, when not ex-
tended beyond reasonable limits, are valid because

n

A LIVING WAGE

they are in accordance with deep and universal
human needs. They confer upon their holders some
right to the fruits of the productive goods thus
owned. Finally, the needs that remain after a decent
livelihood has been obtained by all, ought, as a matter
of social zvelfare and of concrete justice, to be satis-
fied unequally, inasmuch as men who can make a
good use of the non-essential goods ought to obtain
more of them than men who are incapable of any so-
cially useful work. All of these considerations of pro-
ductivity, sacrifice, existing private property, and
capacity for public service, modify the claims of the
principle of needs, and have to be taken into account
in formulating a completely just system of distribu-
tion. 1

It does not follow, however, that the man who
has no private productive property, and whose
efficiency and sacrifices in production are only ordi-
nary, will never have a right to more than the
minimum that constitutes a decent livelihood. If
this were true the just wage and the Living Wage
would mean the same thing for the great majority,
and only the few would have a right to the means of
progressing beyond the bare essentials of a reason-
able existence. But to set forth the requirements
of full and exact justice in the distribution of goods
is happily not the object of this book. It is con-
cerned only with the minimum that will satisfy the
claims of right; hence the present contention is
merely that a person has a right to at least a decent

^A very interesting and penetrating discussion of the dif-
ferent canons of distribution is found in Willoughby's "Social
Justice," pp. 107-215.

78

RIGHT TO SUBSISTENCE

livelihood. It has been said above that this is a
right of access to the appropriate goods "on reason-
able terms." This phrase suggests the limitations
of the right. It is not of such a pressing nature as
the right to subsistence, and therefore does not justi-
fy the taking of private property, even when there
is no other available means of securing its realiza-
tion. It is, moreover, limited by the actual condi-
tions of production and distribution. Subsistence
goods are not as a rule provided by nature in the
precise forms suitable to human use. The raw ma-
terial of living is present in abundance, but the fin-
ished consumption goods must be furnished by
labor. They cannot be obtained by a simple stretch-
ing forth of one's hand. "In the sweat of thy face
thou shalt eat thy bread," is the great law of life
which in some form is binding upon all. It must be
obeyed, up to the limit of reasonable exertion, by all
who would make good their claims to a decent live-
lihood. As all should be enabled to realize the right,
so all should fulfil the conditions upon which it de-
pends. On the other hand, the concrete existence
of the right in all supposes that the total amount of
goods to be distributed is sufficiently large to afford
a decent livelihood for all. Where both of these
conditions are realized the individual's right will be
valid in general against the society of which he forms
a part; for, to quote the words of Prince Liechten-
stein of Austria: "Labor is not merely a matter of
the private order ; it is a kind of function delegated
by society to each member of the body politic. The
peasant who cultivates his field, the artisan who

79

A LIVING WAGE

works in a manufactory, are, so far as society is
concerned, functionaries, just as much as the govern-
ment clerk in his office, or the soldier on the field of
battle. Industrial labor creates, like every other
function, a series of reciprocal obligations between
the society which provfdes it and the worker who
executes it." ^ The right holds in particular against
the person or the industrial or social institution to
whom society has transferred the function of dis-
tribution, and on whom the actual relations of men
and the practical harmonizing and just interpretation
of the natural rights of all, dictate that the obliga-
tion should rest.

* Quoted in Lilly's "First Principles in Politics," pp. loi,

80

CHAPTER V

The Right to an Individual Living Wage

Various ways of defending the Living Wage principle.
The maintenance of industrial efficiency : theory not fully
convincing, and it ignores the laborer's personal dignity.
The theory of an equivalent for expended energy is inconclu-
sive. The principle of just price demands equality of gain
for the two exchangers, and a corresponding formulation of
values and prices. In the opinion of the Schoolmen, thi^
was best accomplished through the medium of the social
estimate. Upon this doctrine of just price some writers
try to base the right to a Living Wage. Criticism of the
doctrine in its theoretical and practical aspects, and con-
clusion it cannot serve as a foundation for this right.
Some remarks on the general validity of the doctrine of
just price. The theory that the laborer's right to a Living
Wage is merely the concrete form of his right to a decent
livelihood. The former right holds against the members
of the community in which the laborer lives, notwithstand-
ing the complexity of modern industry and current ex-
aggeration of the right of private ownership. A truer
view prevailed in medieval society; and occasionally finds
expression to-day. The wage-rights of women and
children.

It is the purpose of this chapter to show that the
workingman's right to a decent livelihood is, in the
present economic and political organization of
society, the right to a Living Wage. The term

6 8i

A LIVING WAGE

"workingman" is taken to describe the adult male of
average physical ability who is dependent exclusively
upon the remuneration that he is paid in return for
his labor. And "an individual Living Wage" means
that amount of remuneration that is sufficient to
maintain decently the laborer himself, without refer-
ence to his family. At the close of the chapter a
word will be said concerning the wage-rights of
women and children.

The advocates of the Living" Wage doctrine do
not all reach their common conclusion by the same
process of reasoning. Some of them base it on the
social benefit to be derived from maintaining the
workers in a condition of the highest industrial
efficiency; others, on the manifest justice of giving
a man sufficient to repair the energy that he expends
in his labor; others, on the "common estimate" of
what constitutes a just price for work; and still oth-
ers, on the personal dignity of the laborer, or his
right to possess the requisites of a decent human
life.

Prominent among those who defend the principle
of a minimum wage on social grounds are Sidney
and Beatrice Webb, and their line of argument is
typical of that large class of writers who habitually
regard the rights and welfare of the individual from
the viewpoint of society. ^ They maintain that the
State ought to enforce a national minimum of wages
which would provide the laborer with "the food,
clothing and shelter physiologically necessary, ac-
cording to national habit and custom, to prevent

* See "Industrial Democracy" ist edition, pp. 766-784.
82

A PERSONAL LIVING WAGE

bodily deterioration." By this means the community
would rid itself of the industrial evil called "parasit-
ism," that is, the existence of trades or businesses
in which the wages paid are too low to maintain the
workers in industrial efficiency, and to enable them
to reproduce and rear a sufficient number to take
their places. These industries take from the nation's
capital stock of character, intelligence and energy
more than they give back, and therefore steadily de-
grade the character and industrial efficiency of the
whole people. Hence, as a matter of simple pro-
tection to the national life, both present and future,
this practice ought to be prohibited, and all workers
ought to be given, through appropriate legal meas-
ures, sufficient remuneration to maintain their pro-
ductive power.

Admitting the premises, this conclusion is obvious-
ly correct, but it is only partially satisfactory to any-
one who regards the laborer primarily as a being
endowed with a personality and rights of his own.
Like every other person, he exists primarily for him-
self, not for society ; and he has rights that are de-
rived from his own essential and intrinsic worth,
and whose prim.ary end is his own welfare. Society
exists for the individual, not the individual for
society, and when there is question of fundamental
rights and interests the good of the individual, that
is, of all the individuals, should be the supreme con-
sideration. Social welfare when taken as an ideal
of effort entirely apart from the welfare of the par-
ticular individuals of whom society is composed, is
either an empty abstraction or, concretely, the wel-

83

A LIVING WAGE

fare of a portion only of its members — the strongest,
or most efficient, or most intelligent. Individual
rights ought, indeed, to be interpreted consistently
with the legitimate interests of society, but this is
only another way of saying that no person's rights
should be extended so far as to violate the rights of
other persons; for the vital fact about injury to
society is always that some wrong is done to a group
of human beings. And, despite the alleged evils of
"parasitism," it is quite conceivable that in some
contingencies social utility would be promoted by
paying some of the least efficient workers a wage in-
sufficient to repair expended energy or to bring out
their highest productive effort. The nation, like
the individual employer, might find it profitable to
wear out quickly a portion of its productive power.
The difference between the product of some laborers
at bare subsistence wages and at a wage adequate to
replace their outlay of energy and evoke their fullest
productivity, might not equal the difference in re-
muneration. In such cases the attempt to obtain
the highest industrial efficiency would be economic-
ally unprofitable. No doubt the advocates of the
view here criticized are too humane to conclude that
society is justified in seeking its own utility at the
cost of inhumanity to any section of its members.
They would probably insist that this course would
in the long run be productive of more harm than
good, owing to the resulting moral deterioration.
With this contention the defender of natural rights
would agree, since he holds that true and permanent
social utility, economic, moral and spiritual, can be

84

A PERSONAL LIVING WAGE

secured only by a general observance of the mora\
law and the law of rights as deduced from the
essential nature of man ; but he would insist that the
doctrine which derives the laborer's claim to a decent
livelihood from considerations of social utility is not
only unsound in theory but extremely dangerous in
practice. Once this view becomes general, the con-
dition of the "sweated classes" will be even more
hopeless than it is to-day ; for only the few are cap-
able of perceiving, or anxious to secure, what will
be beneficial to society "in the long run." The
many will see only the apparent social utility of cheap
goods and cheap services.

The Rev. Charles Antoine, S. J., declares that
there ought to be an objective equivalence between
the labor performed and the wage received. ^ That
is to say, the laborer's remuneration must be suffi-
cient to replace the energy that he has put forth in the
service of his employer, and this as a matter not of
social welfare but of individual rights. While this
formula has a certain show of exact, rigorous justice,
it can be interpreted and applied in such a way that
the "equivalent" compensation will be less than a
Living Wage. For the energy expended by the
laborer is replaced, substantially, as long as he con-
tinues to work with his accustomed efficiency. Any
wage that is uniform from day to day will provide
him with the material means of realizing this end.
The fact is that the amount of energy expended by
the laborer who is wholly dependent upon his wages,
is always limited by his wages, can never be in excess

^"Cours d'economie sociale," p. 6oi.
85

A LIVING WAGE

of them. The subsistence received by the men and
women employed in sweat shops does not repair a
large amount of energy, but, on the hypothesis that
they continue at work, it replaces all that they actu-
ally expend. The rule that Father Antoine proposes
cannot be made the basis of a change for the better,
since it is even now in force throughout the world
of industry. In fact, it would work very well side
by side with "the iron law of wages."

Other writers derive the right to a Living Wage
from the principle of just price. Following the
Schoolmen, they maintain that for every com-
modity, whether goods or labor, that men buy and
sell, there is a price that is just and fair. ^ It is the
price at which the things exchanged will be equal.
Now the equality that may exist between economic
goods can be nothing else but an equality of utility.^
And this equality is to be understood, not absolute-
ly, in the sense that both exchangers will derive the
same amount of satisfaction from the goods received,
but relatively to the inconvenience that each suffers
by depriving himself of the good transferred. ^ It
was as obvious to the Schoolmen as it is to us, that
in every economic exchange both parties make a
gain, or think they do — otherwise the transaction
could never take place. The utility that each obtains
from the thing received is greater than he would have
enjoyed by continuing in possession of the thing

* Cf. Rev. A. Vermeersch, S. J., "Quaestiones de Justitia,"
theses, 25, 28, 29.

^ Cf. Victor Brants, "Les theories economiques aux xiiie
et xive siecles," p. 193, sq.

^ Cf. St. Thomas, "Summa Theologica," 2a. 2ae., q. 77, a. i.

86

A PERSONAL LIVING WAGE

parted with. Now, justice requires that these net
gains should be the same for both sides. Such is the
precise and commonly accepted meaning of the
scholastic formula: "In an onerous contract the two
parties should be benefited equally." It is held to
be a deduction from the personal equality of all
human beings. Men have equal rights, not only to
subsist upon and acquire the fruits of the earth, but
to profit by the exchange of such goods as they have
legitimately acquired. ^

Since the price of goods is merely their value ex-
pressed in terms of money, their value must always
be so assessed and determined that the price will be
just — that both parties will obtain the same quantity
of net advantage. Understood in this sense, the
value of things is primarily an ethical attribute. It
is measured and formulated with reference, not
merely to economic facts, but to this objective moral
standard of equality of gain.^ If the gains resulting
from the exchange of one coat for two pairs of shoes
are unequal the goods have not been rightly valued,
and the contract is not in accordance with ideal
justice. In a word, justice is not realized by ex-
changing commodities at any valuation that the
contracting parties see fit to put upon them, nor at
any other valuation whatever, except the one that is
just, the just price.

* Cf. Rev, A. Castelein, S. J., "Philosophia Moralis et
Socialis," p. 208.

* While criticizing the scholastic doctrine of just price, on
the ground that, as he incorrectly assumes, it took no account
of the factor of human desire, M. Gabriel Tarde adopts in so
many words the scholastic formula of contractual justice. That

87

A LIVING WAGE

Who is to ascertain and fix this just value of things
in actual transactions ? Not those who make the ex-
change, for they are liable to form prejudiced esti-
mates, and the stronger bargainer will be tempted to
use his power at the expense of the weaker. In the
opinion of the Schoolmen, the valuation could be
most reasonably and justly determined by the com-
munity. They admitted, indeed, that the just price
of goods was incapable of exact determination, and
consisted in a "certain estimate" or approximation
("quadam aestimatione"). Hence, they said, it is
susceptible of three grades, lowest, medium and
highest, all of which are legitimate as rules of prac-
tical justice. This method of social appraisal seemed
to them to be a fairly satisfactory device, inasmuch
as it reduced the influence of the individual bias and
individual selfishness (against which the whole doc-
trine of just price was directed) to a minimum. Nor
was the community to act arbitrarily in arriving at
its common estimate; it was morally bound to take
into account certain objective factors, chiefly, the
cost of production, the scarcity, and the general
utility of the goods appraised. Thus formulated,
the "social estimate" was always the proximate deter-
minant of just price.

Upon this doctrine the writers whom we are now
considering base the laborer's right to a Living
Wage. Their argument runs thus : the workingman
has a right to a just price for his labor ; the just val-
uation of any kind of labor is that formed by the com-

price, he says, will be just, "qui donnerait une satisfaction
egale aux deux." "Psychologic economique," II. p. 44.

A PERSONAL LIVING WAGE

mon estimate, or social judgment, of what is reason-
able; now the social judgment declares that a man's
wages ought never to be less than the equivalent of
a decent livelihood; consequently, the just price of
labor is never less than a Living Wage.

The defenders of this view are careful to point out
that the social estimate to which they refer is not the
economic social estimate. The latter is determined
solely by the movement of demand and supply, is
produced unconsciously, by the "higgling of the
market," and is always expressed in actual market
prices. The ethical estimate is a deliberate pro-
nouncement of the social judgment, made independ-
ently of the price-determining action of competition.
It declares the prices and wages that ought to exist,
not those that do exist. In this sense the social
estimate, we are told, maintains that when men are
paid less than a Living Wage they are victims of
injustice. ^

In considering the bearing of the doctrine of just
price upon that of a Living Wage, we must dis-
tinguish between its objective and subjective aspects.
Equality of gain for the two exchangers is the ob-
jective standard of ideal justice; while the subjec-
tive application of the abstract rule to the concrete
facts of industry is found in the social estimate,
which is assumed to be the best available expression
of the requirements of practical justice. Now, our
contention is that neither the ideal standard nor the

^ For an explanation of the difference between the scholas-
tic theory of just price and a modern theory of economic value,
the reader is referred to chapter II ; references to authorities
on the former theory will also be found there.

89

A LIVING WAGE

method of applying it affords a satisfactory logical
basis for the Living Wage principle.

The criterion of equal gains for the two parties to
an economic exchange would seem, at first sight,
to possess all the requisites of a correct rule of
justice. Inasmuch as men are endowed with equal
rights to acquire the resources of the earth, it seems
reasonable to conclude that when two of them enter
into a contract for the exchange of goods that they
have lawfully acquired — a contract in which neither
intends to enact the role of a philanthropist, but
both wish to gain as much as possible — they have a
right to equal quantities of gain. As we saw in the
last chapter, equal rights to the earth do not, indeed,
imply rights to equal amounts of it or its products ;
but this is owing to the existence of other titles of
ownership, such as superior needs, efforts and
productivity, which modify the content of the pri-
mary and fundamental title. No such considera-
tions stand in the way of men's rights to equal gains
from the exchange of their goods. When we look
deeper, however, we find that there are other and
very good reasons for rejecting this standard of
equal gains. In the first place, there is the difficulty
of putting it into practice. No statement of a just
price in terms of money can be formulated which
will enable the two contracting parties to make equal
gains in the case of any good that is frequently
bought and sold. Different men may purchase the
same article from the same merchant at the same
rate, and yet the personal advantage will not be the

90

A PERSONAL LIVING WAGE

same for all of them. ^ According to the theory that
we are discussing, all the buyers ought to profit to
the same extent, provided that the merchant's gains
on all the transactions are equal. And the chances
of inequality are increased when the purchasers deal
with different sellers. The situation is the same
when the commodity dealt in is human labor. It is
morally impossible to appoint a rate of wages from
which the employer and every employee will obtain
the same amount of net utility.

Not only is this standard impracticable (except by
an approximation so broad as to render it superflu-
ous), but in a large proportion of cases it is unsound
theoretically. For example, the man who gives his
last dime to a prosperous baker for a loaf of bread,
gains far more by the transaction than does the
baker. The profit made by the latter is very small,
say, one cent, and represents the satisfaction of a
very trifling want. The other party to the contract
has stilled the keenest pangs of hunger, and possibly
warded off imminent starvation. Any other utility
that he might have procured for his dime is, in com-
parison with the one that he really obtained, insig-
nificant. Consequently, the utility of the bread to
him, whether considered in itself or relatively to any
other good that he might have got for his money, is
much greater than the advantage accruing to the
baker. And yet no one would assert that in the
ordinary conditions of production ten cents is not a
sufficiently large price for a loaf of bread. In

* Cf. J. A. Hobson, "The Economics of Distribution," chap.
I; Tarde, op. cit., pp. 10-22.

91

A LIVING WAGE

accordance with a well known law of value, the
utility of a good to an individual is always propor-
tioned to the importance and intensity of the want
that it satisfies ; hence the more dissimilar the mate-
rial conditions of the exchangers, the more will the
gain of the poorer exceed that of the richer. If the
two are to gain equally the poorer man must pay a
price that all fair-minded persons would regard as
outrageously exorbitant. Only in contracts between
persons whose incomes are substantially equal does
the rule of equality or gains seem to accord with our
everyday conceptions of justice. When, for in-
stance, a shoemaker gives a tailor a pair of shoes in
return for a pair of trousers, their gains are about
equal, since the wants supplied are nearly equal in
importance. The inequality that we are discussing
is even more striking and more frequent in labor
contracts. No matter how low the wage, the labor-
er gains more than the employer. The man who
works for seventy-five cents a day satisfies in some
fashion his most important and intense wants. Com-
pared with this result the pain-cost of the exertion
that he puts forth is quite small. The net advantage
that he derives from the contract is, therefore, very
large; whereas the employer's profit is a small
amount of money which, in a great many cases,
represents a few cigars or some equally secondary
utility. According to the equal gain principle, the
laborer is getting more than is just, although his
remuneration is far below the limit of a Living
Wage. As a general rule, the employer who has
any considerable number of men on his pay roll does,

92

A PERSONAL LIVING WAGE

indeed, obtain from the aggregate of his wage-con-
tracts more utility — a greater satisfaction of wants
both intensively and extensively — than any one of
his employees, but his gain is less than the total gains
of all of them ; and in any one contract it is smaller
than the advantage received by the other party, the
laborer.

As a matter of fact, the Schoolmen never made
any consistent attempt to apply the principle of
equality of gains to industrial contracts. When
they declared that the community, or, more precise-
ly, those members of it whose reputation for fairness
was highest, was the most competent agency to
determine the concrete price that would safeguard
equality between buyer and seller, they also de-
clared, as we have seen above, that the decision of
the community, the social estimate, ought to be
based upon the general utility, the relative supply,
and the cost of production of the commodity. Now
,these are objective factors, but they are in no sense
an expression or interpretation of the objective
standard of equality of gains. A price fixed in ac-
cordance with them would not always — would never,
perhaps — enable both exchangers to obtain the same
amount of profit. Hence the Schoolmen's working
criterion of just price implies a complete setting
aside of their ideal standard. Indeed, their insist-
ence on the cost of production as one of the deter-
minants of the just price of goods was a recognition
of the principle of a Living Wage ; for cost of pro-
duction in medieval industry was labor cost, the just
measure of which was the customary needs of the

93

A LIVING WAGE

class performing the labor. "With the canonists,
this idea of class duties and class standard of com-
fort is either explicitly or implicitly referred to as
final test in every question of distribution or ex-
change. Thus Langenstein — who, after being vice-
chancellor of the University of Paris, was called to
teach at the New University of Vienne in 1384 — lays
down that everyone can determine for himself the
just price of the wares he may have to sell, by simply
reckoning what he needs in order to suitably support
himself in his rank of life." ^ Thus, the Schoolmen
measured the just price by a Living Wage, instead
of basing the latter upon the former.

So much for the theoretical standard : the practic-
al criterion, the "social estimate," is unsatisfactory,
either as a justification or as a measure of the Liv-
ing Wage. To begin with, it is too vague. Does
it describe the unanimous, or morally unanimous,
judgment of the community — what the older writers
called the "sensus communis" ? or, is it another name
for "public opinion" ? Does it mean custom ? Possibly
it refers to the deliberate judgment of a body of men
chosen from the various classes, intellectual, in-
dustrial and religious, of the community. Let us
see whether any of these social estimates will serve
to-day as a working rule of industrial justice.

The first of them undoubtedly sanctions the prin-
ciple of a Living Wage. Our knowledge of the
average man's moral beliefs entitles us to assume

^Ashley, op. cit., II, p. 391; cf. Brants, op. cit., p. 119,
where the text and reference are given ; and Janssen,
"Geschichte des deutschen Volkes," I, p. 447.

94

A PERSONAL LIVING WAGE

that he holds, at least in the abstract, that the laborer
ought to have the means of living comfortably and
decently. But concerning the amount of subsist-
ence goods comprised in the idea of a decent liveli-
hood, the "sensus communis" lacks definiteness.
The best that it can give us is a compromise derived
from a multitude of individual or class estimates.
We have, however, no means of ascertaining the
content of this compromise, or average estimate,
and, even if we had, we cannot be certain that it
would be in harmony with reason and justice. In
judging of the larger and more general questions of
morality, the common convictions of mankind are
sufficiently trustworthy ; but in details its judgment
is easily perverted by the influence of bad and long
established custom.

Second, that somewhat capricious form of the
social estimate, called public opinion, is vitiated by
defects similar to those just enumerated. Its ver-
dict concerning the precise requisites of a Living
Wage will necessarily be too general, and too diffi-
cult of ascertainment. It is, moreover, essentially
variable and therefore untrustworthy. Indeed, if
we accept the press as its mouthpiece we must admit
that it has not declared in favor of even the princi-
ple of a Living Wage.

In the third place, it is undoubtedly true that a
fairly definite standard of industrial justice is found
in custom ; but it is not a reliable standard. The
custom of our time approves of wages that are insuf-
ficient to afl^ord the conditions of a decent liveli-
hood— witness the remuneration of the "sweated"

95

A LIVING WAGE

classes. As we saw in Chapter II, the canonist,
Reiffenstuel, accepted custom as a criterion, and ar-
rived at the conclusion that justice did not require a
man's wages to be equivalent to a decent livelihood.

Finally, the pronouncement of a carefully selected
and representative committee would, it is probable,
be sufficiently definite and trustworthy. If the social
estimate, thus understood, declared that every laborer
ought to have a Living Wage, and defined what it
meant by this phrase, its decision would probably
satisfy all reasonable minds, and be the nearest ap-
proach to a correct estimate of a Living Wage that
is practically attainable. Since, however, no such
judicial body exists, its assumed pronouncements
cannot be made to serve as the basis of the Living
Wage doctrine.

The theory which founds a Living Wage upon the
principle of just price has been discussed at this
length because the concepts and formulas underly-
ing it dominated the industrial theory and practice
of Europe for centuries, and because they are still
quite common in ethical literature. One after an-
other the Schoolmen of the Middle Ages asserted
and expounded the principle that goods and labor
had a certain just price. And they were right; for
when we admit that a commodity can be sold at an
exorbitant price we tacitly assume that it has some
other price which is not exorbitant, which is just.
An action cannot be adjudged wrong except by
reference to some standard of right. The precise
determination of that standard is another matter.
The Schoolmen's theoretical formulation of it—

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A PERSONAL LIVING WAGE

equality of benefit or gain for buyer and seller — is
undoubtedly a particular application of the general
principle that, since men are by nature equal, justice
regards them as essentially equal in relation to their
property, and demands that whenever private prop-
erty changes hands (except in the case of gifts)
equality should be maintained between the thing
parted with and the thing received in return.
"Aequalitas rei ad rem," was the scholastic phrase, i
According to this principle, property that has been
unjustly taken away must be restored to the owner
in its integral self or in its equivalent ; and, secondly,
in free exchanges the thing received should be
equivalent to the thing transferred. This general
statement is correct, expresses, in fact, the very
essence of abstract justice between man and man;
but, as we have seen, "equality between the things
exchanged" cannot consistently with distributive
justice be translated into "equal gains for the ex-
changers." ^ We have seen, too, that the Schoolmen
never made any practical use of this theoretical in-
terpretation of equality ; and we may be pardoned
the wish that certain modern writers would discard,
not only it, but certain kindred phrases and concepts^
that are equally ambiguous and misleading. A
French economist, M. Charles Perin, has observed
that many theological writers have hesitated to ac-
cept the reasoning of Pope Leo's encyclical, accord-

* See Costa-Rosetti, "Philosophia Moralis," thesis 107,

* In fact, it may be laid down as a general principle that the
reciprocal gains ought to be unequal whencTcr, and to the ex-
tent that, such inequality will reasonably offset or correct
previously existing inequality between the two parties.

7 97

A LIVING WAGE

ing to which the minimum just wage is based upon
the laborer's dignity as a person, and measured by
his essential needs. ^ Apparently they dislike to part
with traditional modes of expression, and so con-
tinue to repeat the old formulas about the laborer's
right to a remuneration that is the "worth," or
"equivalent," or "value," of his labor. In so far as
these statements are true, they are truisms ; in so far
as they have any concrete, serviceable meaning they
are not true. If, for example, the word value be
taken in the sense of the actual economic, or market,
value of labor, the statement in question becomes
equivalent to the assertion that the laborer is justly
treated whenever he receives the wages that are as-
signed to him by supply and demand, even though
these may lie on the borderland of starvation, if
moral value is meant the statement is correct, but
not very illuminating, since it suggests no method
of estimating the moral value of labor in terms of
livelihood or wages. As to the practical interpreta-
tion of just price provided in the social estimate, it
seems to have served very well for the small com-
munities and simple economic relations of the Middle
Ages. 2 When masters and men lived together in a
relationship "like unto that of fathers and sons";
when the whole body of consumers and producers
who were interested in arranging a scale of wages
and prices was found within the limits of a small
town ; when the classes of goods and services that
were to be appraised were few in number and simple

^ "Premiers principes d'economie politique," 2d edition,

pp. 389, 390-

*Cf. Ashley, "Economic History," I, p. 138.

98

A PERSONAL LIVING WAGE

in character ; and when the standard of Hving was
nearly uniform throughout the community — in these
circumstances the "communis aestimatio" of the
just price of labor was apt to be more or less precise,
and could be readily made manifest to all concerned.
Moreover, the social estimate often became crystal-
lized into custom. It was, therefore, not only defin-
ite and patent, but more or less constant during long
periods of time. And, since it was formed under
the immediate and powerful influence or moral and
religious teaching, it was in fairly close conformity
with ethical ideals. ^ As a working rule of fair
dealing, it is even to-day valid in principle; for it
implies the essence of the arbitration idea, a disin-
terested body of judges: but it stands in need of a
new and more precise formulation. Its limitations,
too, must be kept in mind : it is not an absolute but
a subjective expression of right; and it must, as the
Schoolmen insisted, always take account of certain
objective factors, among which are man's natural
rights to life, liberty, and a becoming amount of the
comforts of life.

Finally, we come to the doctrine which deduces
the laborer's right to a Living Wage from his per-
sonal dignity and his right to a decent livelihood. ^
It has been shown in the last chapter that, on account

^ Cf. Ashley, op. cit., II, 388.

' Cf. Rev. A. Pettier, "de Jure et Justitia," pp. 220-265 ;
Verhaegen, "le minimum de salaire" ; Pope Leo XIII, in
"Rerum Novarum" : "The preservation of life is the bounden
duty of each and all, and to fail therein is a crime. It follows
that each one has a right to procure what is required in order
to live ; and the poor can procure it in no other way than by
their wages."

99

A LIVING WAGE

of his sacredness as a person, every member of a
community has an abstract right to a decent HveH-
hood, and that this right becomes concrete and actual
when the material goods controlled by the commun-
ity are sufficient to provide such a livelihood for all,
and when the individual performs a reasonable
amount of useful labor. It is assumed that the first
condition is verified ; and it is maintained that the
second is fulfilled by the man who labors for hire
during a working day of normal length. His general
right to as much of the earth's fruits as will furnish
a decent livelihood is clear; the correlative obliga-
tion of his fellow members of the community to ap-
propriate and use the common bounty of nature con-
sistently with this right, ought to be equally clear.
Now, the simple and sufficient reason why this
general right of the laborer takes the special form of
a right to a Living Wage, is that in the present in-
dustrial organization of society, there is no other
way in which the right can be realized. He cannot
find a part of his livelihood outside of his wages be-
cause there are no unappropriated goods within his
reach. To force him to make the attempt would be
to compel him to live on less than a reasonable min-
imum. And the obligation of paying him this
amount of wages rests upon the members of the in-
dustrial community in which he lives ; for they have
so appropriated the resources of nature, and so dis-
tributed the opportunities and functions of industry,
that he can effectively realize his natural right of
access to the goods of the earth only through the
medium of wages. As long, therefore, as the

100

A PERSONAL LIVING WAGE

present organization of industry exists, the obligation
of not hindering the laborer from enjoying his right
to a decent livelihood will be commuted into the
obligation of paying him a Living Wage.

The right to a Living Wage is asserted to be valid
against "the members of the community in which the
laborer lives." Whether the term "members" refers
merely to the employers, or to other persons as well,
or to the community in its civil capacity, that is, the
State, will be fully discussed in later chapters. For
the present it is sufficient to point out that tke right
exists, and that it holds against those who are re-
sponsible for converting the laborer's opportunity of
getting a living into the opportunity of receiving
wages. "The industrial community in which the
laborer lives" can be defined only approximately. It
describes that section of the world's inhabitants with
which the laborer comes into somewhat close eco-
nomic relations, chiefly, those who are primarily
benefited by his labor, and those who have appro-
priated that portion of the earth's resources that
otherwise would be practically within his reach.
Evidently these classes or persons are under obli-
gations of justice toward the laborer that are shared
only slightly, if at all, by men living on another con-
tinent. The latter may, indeed, have been benefi-
ciaries of the laborer's toil, but they cannot practical-
ly do anything toward securing to him a Living
Wage, beyond paying a fair price for his product;
besides, they are under more pressing industrial obli-
gations toward their immediate neighbors. It is
also true that they have appropriated some of the

lOI

A LIVING WAGE

common bounty of nature to which the laborer on
the other side of the globe has, as one of the children
of men, an indefinite birthright; owing, however, to
the intervening distance, they have not vitally in-
terfered with the realization of this right. Men's
rights and obligations respecting their common
heritage of material goods must be applied and
interpreted with a reasonable regard to their various
conditions of place, possession, ability, and oppor-
tunity.

One of the principal reasons why the right to a
Living Wage has been obscured in the minds of
many men, is the complexity of modern economic life.
An example or two will illustrate this contention.
Let us suppose that six men settle upon a no-man's
land, and proceed to divide it amongst them. Al-
though it is capable of affording a comfortable liveli-
hood for all six, five of them — an undoubted majority
— organize a government, and divide the land in such
a way that the portion allotted to the sixth will barely
keep him alive. Each of the other five is thus enabled
to enjoy something more than a decent livelihood.
Now, it is safe to say that ninety-nine of one hundred
men would condemn this proceeding as unjust.
They would maintain that the right of the sixth man
to the whole amount of land distributed was just as
good as the right of any of the others, and that no
reason, title, or justification existed for depriving
him of an equal share, when that much was essential
to a decent livelihood. Imagine, now, a company of
fifty men taking up their abode on a territory that no
man has previously visited or claimed. Instead of

102

A PERSONAL LIVING WAGE

dividing up the land, they till it in common, and dis-
tribute its produce. Not all of them, however, labor
upon the soil ; there is a shoemaker, a weaver, a tail-
or, a carpenter, and so on ; every man performs the
task for which he is best fitted. But the distribution
of their common product is so carried out that forty-
five can live in abundance, while the remaining five
have merely the means of continuing to exist and
work. The services of these latter, so the other fi/e
assert, are not worth more than this pittance. Again
it is palpable that the common product of a common
property has been unjustly apportioned by the arbi-
trary action of the majority ; for the five, we assume,
perform a reasonable amount of useful labor. The
case is precisely the same, at least in principle, in
the more complex and elaborate industrial conditions
of to-day : the members of a community who are in
control of its land and resources, violate the laborer's
right to live decently out of the common bounty of
nature when they so take advantage of the existing
distribution of private property as to deny him a
Living Wage. In exercising their right of access
to the earth, they make it impossible for the laborer
to exercise his as fully as is demanded by decency
and justice. And they do it just as effectively, they
are as truly responsible for the laborer's inability to
enjoy his natural right, as the greedy and arbitrary
majority in the above mentioned examples. For
the laborer, generally speaking, is as little able to
change his location as are the harshly treated mem-
bers of those two isolated communities. A few
workingmen could, indeed, find a living elsewhere,

103

A LIVING WAGE

but the overwhelming majority must stay where they
are, or merely exchange places with one another, — .
unless the whole machinery of industry is to stop,
and mankind to perish off the face of the earth.
The controllers of the industries and material re-
sources of a community cannot get along without
wage-workers; rather than make the attempt, they
would gladly pay every one of them a Living Wage ;
which is a clear indication that they regard the
laborer as really worth that amount. Hence the
complexity of the present industrial system obscures,
but in no way annuls, either the rights of the laborer,
or the correlative obligations of his fellow citizens.

Another cause of the prevailing indifference to-
ward these rights and obligations is ignorance and
neglect of the common, or social, aspect of property.
All too general is the notion sanctioned by the defi-
nitions of property in the Roman Law and in the
Civil Code of France, that a man has a right to do
with his own what he pleases. ^ Such a claim Is
obviously absurd, since men have not a right to do
as they like with their faculties, to say nothing of
the bounty of nature which was created for the bene-
fit of all. They have a right to do with their own
only that which is consistent with the rights of others.
The private proprietor too often forgets that his right
of ownership is valid only as a rneans to his right of
use, and that the latter is a right common to all man-
kind, which he is obliged to interpret and exercise
within such limits that its realization shall be possible

Cf. "Propriete, capital, et travail," by L'Abbe Naudet,
pp. 29-31.

104

A PERSONAL LIVING WAGE

for his fellow men likewise. He forgets that when
he appropriates a portion of the earth's resources for
his own use and benefit he diminishes by that much
the amount available for private ownership by the
rest of men. He forgets that his less fortunate
neighbors, among whom must be counted the laborers,
have, on account of their inborn right of access to
the world's material goods, some sort of claim to
that part thereof which he caMs his own. The ex-
aggeration of the scope of individual ownership, and
of the ability of the propertyless man to take care of
himself in the competitive struggle, has converted
into a maxim of business ethics the contention that
employer and employee have no property rights
against each other except those expressly named in
the labor contract. The fact that a contract may
be the occasion of a right which it does not explicit-
ly provide for, is entirely overlooked. It is for-
gotten that the laborer enters the wage-contract as
a man endowed with a natural and indestructible
right to a decent livelihood, which the contract
renders impossible of realization except through the
medium of wages. His right to a Living Wage is
merely the former right as modified and determined
by the contract. In so far as it is valid against his
employer, it is produced neither by his contract with
the latter nor by his right to a decent livelihood,
taken separately, but by the two in conjunction.

A truer and more humane conception of the re-
lation between the right of individual ownership and
the right of use, and of the duties of the private
proprietor, was developed and fostered in medieval
los

A LIVING WAGE

society. The Christian doctrine that private owner-
.ship is not an absolute right, but merely a form of
stewardship, according to which the individual holds
his wealth from God and is obliged to administer it
for the benefit of others, as well as of himself, was
more frequently preached, and more generally and
vitally accepted than it is to-day.* In the thirteenth
century, we find Pope Clement IV permitting
strangers to occupy and till the third part of any
estate which the proprietor refused to put under
cultivation himself. Pope Sixtus IV, in the fif-
teenth century, made the same regulation with re-
gard to domains in the Papal territory. ^ Here we
have a clear recognition of the principle that a man
has not a right to do what he pleases with his own,
but only that which is consistent with the right of
common ownership in his needy neighbors. Every
man performing a function in the medieval organ-
ization of industry, the lord of the land, the free
tenant, the villain, the serf, the merchant, the master-
craftsman, the journeyman, the apprentice, was
regarded as rendering a social service. In return
for this contribution to the community, the indi-
vidual had a right, according to medieval theory,
to security in his position or status, and to the means
of living in conformity with the customs of his
social rank. ^ This, again, was merely the doctrine
of man's right to a living from the bounty of the
earth, applied to the conditions of medieval society.

*Cf. Cunningham, "Western Civilization," II, pp. 104-107.
'^ Cf . Naudet, op. cit., pp. 35, 36.

^ Cf. Weiss, "Apologie des Christenthums," IV, 368, sq. ;
Ashley, "English Economic History," II, pp. 389-393-

106

A PERSONAL LIVING WAGE

Concrete assertions of the same principle are heard
to-day in the claim of the laborer that he has a right
to work and a right to the job that he has held for
a considerable time; in the conviction of the em-
ployer that his workmen commit an act of injustice
when they arbitrarily quit work; and in the conten-
tion of the independent dealer or manufacturer
that he has a right to the business of which he is
deprived by the practice of temporary underselling
pursued by the trust. The principle underlying all
these beliefs, medieval and modern, is that formu-
lated by Aristotle as a canon of social expediency,
"it is best to have property private, but to make the
use of it common" ; and by Aquinas as a requirement
of justice, "it is right that the ownership of goods
should be private, but the use of them ought to be
common, so that the owner may readily minister
therefrom to the needs of others."

To the objection that some laborers possess other
means of living in addition to their labor power,
the answer is that these are rather rare exceptions.
Whether they also have a right to a Living Wage,
is of comparatively small importance. Still it
would seem that the question ought to be answered
in the affirmative, since they perform as much labor
as their less fortunate fellows. At any rate, there
are good social reasons for paying them as much as
is received by the other workers of their group.

A word will not be out of place concerning the

wage-rights of women and children. According

to the foregoing reasoning, it is evident that those

women who are forced to provide their own suste-

107

A LIVING WAGE

nance have a right to what is a Living Wage fof
them. Since they have no other way of living but
by their labor, the compensation therefore should
be sufficient to enable them to live decently. Again,
women doing the same work with the same degree
of efficiency as men in occupations where both
sexes are employed, have a right not merely to a
woman's Living Wage, but to the same remunera-
tion as their male fellow workers. Distributive
justice requires that equally competent workers be
rewarded equally. Moreover, when the women
receive less pay than the men the latter are gradual-
ly driven out of that occupation. ^ Unless we hold
that an increase in the proportion of women work-
ers is desirable, we must admit that social welfare
would be advanced by the payment of uniform
wages to both sexes for equally efficient labor. ^

Children of either sex who have reached the age
at which they can, without detriment to themselves
or society, become wage earners, but who cannot
perform the work of adults, have a right to a wage
sufficient to afford them a decent livelihood. They
are entitled to this because their wages, generally
speaking, constitute their sole source of mainte-
nance. It must be noted that a Living Wage for
children refers to their essential needs as members
of a family, not to the requisites of boarding-house
life, as this is not the condition in which working
children are usually placed. Finally, children of
either sex who perform the work of adults ought

* Cf. Smart, "Studies in Economics," chapter on "Women's
Wages."

^Cf. Fairbanks, "Introduction to Sociology," p. 148.

108

A PERSONAL LIVING WAGE

to receive the wages of adults, for the same reasons
that justify the payment of men's wages to equally
efficient women. ^

^ In speaking of a Living Wage, whether for men, women,
or children, it is assumed that they are employed during the
whole of the working time of the year. Consequently, women
who are obliged to devote all their attention to household
duties for a oonsiderable portion of the year, and children who
attend school, are not entitled to a Living Wage for the entire
year. As we shall see, their right to a Living Wage must be
secured in another way.

109

CHAPTER VI

The Right to a Family Living Wage

The controversy regarding the attitude of Pope Leo's
Encyclical toward a family Living Wage. Cardinal Zig-
liara's peculiar interpretation of the principle of equivalence.
His argument from the family's relation to the work done
by the husband and father. The theory that a wage suf-
ficient for family maintenance is due merely as a matter
of social utility. The theory that bases it on "equity." And
on the sociai estimate. A family Living Wage is due to
the adult male laborer because of his dignity as a man and
his essential needs. An objection answered. The family
Living Wage is a uniform quantity, and is due to all adult
male laborers. The size of family to be taken as a measure
of this wage.

When Pope Leo XIII, in his encyclical, "On the
Condition of Labor," declared that the remuneration
of the workingman ought to be at least sufficient
"to support him in reasonable and frugal comfort,"
a discussion immediately arose among Catholic
moralists as to whether the phrase just quoted was
intended to cover the conditions and requisites of
family life. Those who held to the affirmative
cited in confirmation of their position the following
passage, which occurs in the next paragraph of the
encyclical: "If a workman's wages be sufficient to

no

A FAMILY LIVING WAGE

maintain himself, his wife, and his children in rea-
sonable comfort, he will not fir.d it difficult to

put by a little property."

Unquestionably the hypothetical wages referred
to are assumed to constitute the compensation that
is normal, but there is no explicit assertion that so
much is due the laborer as a matter of justice.
Within a few months after these words were writ-
ten, a letter was addressed to the Holy See by the
Archbishop of Malines, Cardinal Goosens, asking
whether an employer would do wrong who paid his
men a wage sufficient for personal maintenance,
but inadequate to the needs of a family. Pope Leo
did not himself send any official response, but re-
ferred the matter to Cardinal Zigliara, who replied
that the employer in question would not violate
justice, but that his action might sometimes be
contrary to charity, or to natural righteousness.
At present all Catholic writers on the subject hold
that the employer is under moral obligation to give
the workingman a wage that will maintain his
family as well as himself, but they do not agree that
this obligation falls under the head of justice. In
other words, some of them deny that the laborer has
a strict right to a family Living Wage. ^

Cardinal Zigliara's explanation of his decision
leaves something to be desired, both in clearness
and in conclusiveness. He says that when a rela-
tion of equality exists between the labor performed
and the compensation received the demands of

^ A critical review of this discussion will be found in
Vermeersch, op cit., pp. 530-554. Cf. also, Turman, "Le
Catholicisme sociale," pp. 58-68.
Ill

A LIVING WAGE

justice are fully satisfied; and he plainly intimates
that this condition is verified when the laborer Is
paid merely an individual Living Wage. According
to this reasoning, the minimum means of a decent
livelihood is likewise the maximum that any laborer
can claim as a matter of justice. A Living Wage
is in all cases a completely just wage. As this as-
pect of the wage problem does not come within the
scope of our argument, it is given merely a passing
mention to show the danger of attempting to base
the right to a Living Wage upon assumptions of
equality between labor and remuneration. He says
that in labor-contracts the rule of equality must be
interpreted with reference to the laborer's duty of
self-support. The remuneration must be adequate,
equal, to this end ; hence the relation of equality has
for one term the laborer's wages, and for the other
his purely personal needs. In the last chapter some-
thing was said concerning the ambiguity to which
the principle of equivalence is liable : the interpreta-
tion that we are considering looks like an abandon-
ment, or, at least, an essential transformation of it ;
for the equality required is no longer between the
things exchanged, labor and pay, or between the net
gains of the two contracting parties, but between
compensation and the laborer's welfare. The Cardi-
nal defends his interpretation on the ground that
human labor, being the product of a person, is of
much greater dignity than merchandise, and ought
not to be measured by precisely the same standard
of contractual justice. Not merely the work itself,
but the human doer of it, must be taken into account

112

A FAMILY LIVING WAGE

in determining its just equivalent. Undoubtedly;
but why should it be assumed that a just equivalent
is found in the bare essentials of decent living out-
side of the married state? Since the laborer has
many other needs, the satisfaction of which is mor-
ally legitimate, does it not seem just that his wage
should be capable of meeting all, or, at least, the
more important of them? Ought it not to be the
equivalent of a comfortable and care-free family
life, of a college education for his children, an
annual pleasure trip for himself and wife, and, for
all of them, ample opportunities of cultivating the
higher life? The assertion that the equivalence that
ought to exist between pay and work is realized
when pay equals a personal Living Wage, is reaily
very like a begging of the main question. As an in-
terpretation of the equality principle, it is quite as
arbitrary and quite as incapable of proof as the one
advanced by Father Antoine and noticed in the last
chapter, namely, that the remuneration ought to be
equivalent to the labor-force expended.

Cardinal Zigliara says further that, since the
product for which the laborer is paid is not partici-
pated in nor increased by his family, justice does not
require that his remuneration should be increased
on their account. But those who defend the labor-
er's right to a family Living Wage do not deduce
it from any relation, real or assumed, between his
family and the work that he performs or the employ-
er that he serves. They derive it from his own
dignity as a man. It is a personal prerogative
which has, however, his family as a secondary bene-

8 113

A LIVING WAGE

ficiary. The Cardinal admits and maintains that
the laborer has a right to a wage sufficient for his
support outside of the marriage relation. Now this
means that the laborer will give a part of his earn-
ings to some merchant in exchange for the clothes
that he wears, making the merchant to that extent
a secondary beneficiary of his wages ; yet Cardinal
Zigliara would not have argued that, since the
clothier has nothing to do with the work performed
by the laborer, the latter has no right to the portion
of his remuneration thus expended. Neither does it
follow that he has not a right to the measure of
wages necessary to provide for his family. The
two cases differ, indeed, in degree, but they are
alike in principle. In both the primary purpose of
the right asserted is the welfare of the laborer him-
self, while the secondary end is in the former case
the clothing merchant, and in the latter the laborer's
family. As a matter of fact, the argument that we
are criticizing looks like a different interpretation
of the equivalence principle than the one discussed
in the preceding paragraph. It points logically to
the conclusion that the laborer has a strict right
merely to the amount of compensation that will keep
in repair those physical forces that are essential to
the performance of his task. According to this
interpretation, the relation of equivalence is not be-
tween wage and reasonable personal needs outside
of the married state, but between wage and expended
labor- force ; and the laborer has a right, not to com-
pensation that will support him in "reasonable and
frugal comfort," but to that which will provide him
114

A FAMILY LIVING WAGF

with the bare necessaries of life and working effi-
ciency.

Father Antoine deduces the laborer's claim to a
family Living Wage from considerations of social
welfare. ^ In any rightly ordered society the father
is the natural provider for all the members of the
family; if he lacks the means of performing this
duty adequately the result is pauperism, crime and
other social evils. Hence the laborer who is the
head of a family ought to receive compensation
sufficient for the becoming maintenance of his wife
and children. This much is due him from his em-
ployer, not by any relation of strict justice — for
under this head the laborer can claim merely the
means of repairing expended energy — but as a mat-
ter of "natural righteousness" or decency {'lion-
nefete naturelle"). Because of his relation to so-
ciety on the one hand, and to his employees on the
other, the employer is morally bound to discharge
this task. Concerning this argument it will be
sufficient to say that the positive part of it is entirely
sound ; for social welfare does require that the mar-
ried laborer should command the means of properly
providing for his family, and that the employer
should furnish these means ; while the assertion that
this minimum of remuneration is not due the labor-
er by a title of strict justice, is based on the assump-
tion, already criticized, that the equivalence between
work and pay demanded by justice is fully satisfied
by a wage that replaces the output of labor-force.

According to Father Castelein, the value of a

* Op. cit., p. 606.

lis

A LIVING WAGE

man's labor is always equivalent to an individual Liv-
ing Wage, but not necessarily to a remuneration
that will provide for the needs of a family. After
the laborer has been paid a wage sufficient for per-
sonal maintenance, and after the other factors of
production have been fairly remunerated, there will
normally remain a certain gross profit which in
"general justice," or "equity," ought to be divided
between employer and employee. If this distribu-
tion is fairly carried out the laborer will, generally
speaking, receive sufficient for his family's support.
Like Father Antoine's, this view is correct on its
positive side, but its denial of the laborer's right to
anything more than the means of personal mainte-
nance is but feebly defended by its champion. When
Father Castelein turns from his perplexing and in-
effective discussion of the kind of justice that is
involved, he admits that a family Living Wage is
due the laborer because of his dignity as a man. ^

Father Vermeersch asserts that the social esti-
mate, which is always the proximate determinant of
the just price of labor, regards the labor of the head
of the family as worth at least a family Living
Wage. He does not, however, content himself
with this argument. If the laborer, he says, fails to
secure this amount his personal independence, or
personal dignity, is ignored; the exercise of some
of his most essential powers and faculties is hin-
dered ; his fundamental right to the use of the
world's goods is violated. ^ The validity of the

^ Op. cit., pp. 376-395-
* Op. cit., thesis 29.

116

A FAMILY LIVING WAGE

argument from the social estimate has been suffi-
ciently criticized in the last chapter. The argument
from the personal dignity of the laborer, however,
is sound, — is, in fact, the only one that rests securely
on the fundamental principles of natural justice. ^

For the laborer who complies in a reasonable
degree with nature's universal law of work, has a
natural right to at least the minimum of the material
conditions of decent and reasonable living. This
proposition has received ample development and de-
fense in foregoing chapters. Now a decent and
reasonable life implies the power to exercise one's
primary faculties, supply one's essential needs, and
develop one's personality. Self-preservation is un-
doubtedly the "first law of nature," but, if the ex-
perience of the race is any criterion, self-propaga-
tion is the second. At least, it is the expression of
one of man's primary and strongest instincts. One
of his most essential needs is the permanent love and
companionship of a person of the opposite sex. The
marriage state is not so imperatively necessary for
right living as is security of life and a decent
personal livelihood, yet it is of primary importance.
The difference between these three needs is merely
one of degree. All must be satisfied in the average
man before he can live a reasonable and normal life.
Without a religious vocation, the majority of men
cannot reach a proper degree of self -development
outside of the conjugal state. This is not to say that
the man who has not been supernaturally called

^ Among the ablest presentations of this view are those of
Pottier and Verhaegen in the works already cited.

117

A LIVING WAGE

cannot be celibate and chaste — a doctrine becoming"
only to the foul of mind and weak of will — ^but it
means that for the average man celibacy is not nor-
mal, and consequently cannot be taken as a measure
of reasonable and natural rights. The man who is
forced by poverty to accept it supports an unnatural
and unjustifiable burden, and is deprived of one of
the chief means of normal self-development. Hence,
"the minimum of the material conditions of decent
and reasonable living" comprises, for the adult male,
the means of supporting a family. To this much of
the world's goods he has a natural right which is
valid "against the members of the industrial com-
munity in which he lives," In the case of the labor-
er this claim must be formulated in terms of wages.
To resume : the laborer has a right to a family Liv-
ing Wage because this is the only way in which be
can exercise his right to the means of maintaining a
family, and he has a right to these means because
they are an essential condition of normal life.

It has been objected that according to this reason-
ing, the laborer would be entitled to a wage sufficient
to support his infirm and needy parents. To care
for them is both his duty and his right ; consequent-
ly he has a right to the one means adequate to this
end, an increased remuneration for his labor. The
cases, however, are not in all respects parallel. The
right to become the head of a family is essentially
different from the right to support infirm parents.
The former is a necessary condition of normal and
reasonable self-development, and implies the right
to the material goods required for its realization.

ii8

A FAMILY LIVING WAGE

The right to the means of maintaining a family,
therefore, is not finally derived from the duty of
maintaining it — from the needs of the family — but
from the laborer's dignity, from his ozuii essential
needs. True it is that if the support of wife and
children did not in the normal order of things fall
upon the husband and father, he would not have a
right to the additional remuneration required for
this purpose; but this merely shows that the duty
is the occasion, or condition, not the ultimate cause
of the right. The right to the conditions of being
the head of a family, which is obvious, implies the
right to a family Living Wage, because nature and
reason have decreed that the family should be sup-
ported by its head. But the right to support one's
needy parents rests upon an entirely different basis.
Its existence is not an essential condition of right
and reasonable life ; for in the normal order of things
the parents themselves will have, or should have,
taken precautions against such an emergency. And,
as rights are not to be interpreted by the abnormal
and exceptional exigencies of existence, the laborer
cannot justly claim an increased wage on account
of them.

It is held by some that the laborer's remuneration
should vary with the size of his family, but this seems
an undesirable way of measuring it. There are
many reasons why the cost of rearing the family
should be regarded as a unit, and the laborer's wa-
ges as a uniform rate. Then the cost of maintain-
ing himself and wife until death and the children
until they are of an age to be self-supporting,

119

A LIVING WAGE

divided by his working time as an adult in full vigor,
will give in terms of money the family Living Wage.
Hence the laborer who is not yet married has a right
to this family wage, and not merely to a remunera-
tion that will suffice for his present needs. The
difference should be reckoned as a necessary provi-
sion for marriage, and, therefore, as slightly dimin-
ishing the rate of pay that otherwise would be
necessary as soon as the laborer entered the con-
jugal state.

Moreover, the right to a family Living Wage be-
longs to every adult male laborer, whether he in-
tends to marry or not; for rights are to be inter-
preted according to the average conditions of hu-
man life, and these suppose the laborer to become
the head of a family. There is, too, a good social
reason for treating married and unmarried alike in
the matter of remuneration. If employers were
morally free to pay single laborers less than a fam-
ily Living Wage they would strive to engage these
exclusively, and perhaps to exact a promise that
they should not marry. Thus a premium would be
placed upon a very undesirable kind of celibacy.

The family that it seems reasonable to take as a
basis for estimating the proper remuneration of the
husband and father, is that containing the average
number of children found in workingmen's families.
This standard is not entirely satisfactory, since it
not infrequently happens that the mathematical
average is exceeded in a large number (a majority
sometimes) of the families of a place, but it seems
to be the best that is available. We cannot take

120

A FAMILY LIVING WAGE

"the number of children that is usual," as suggested
by Father Vermeersch, ^ for the expression has no
precise meaning; no such number exists. In five
different groups of full-grown families (1636 in all)
described in the Sixth and Seventh Annual Reports
of the United States Commissioner of Labor, the
following facts are to be observed : the number of
children per family in a bare majority of the fam-
ilies of three of the groups, was represented by three
different figures ; in the other two groups the "usual
number" was four different numbers. The prob-
lem will be made somewhat more definite by an ex-
ample : in one group, consisting of 832 families, the
numbers most frequently recurring were three, four,
and five ; that is to say, there were 149, 128, and 121
families containing respectively three, four, and
five children. Now it could scarcely be said that
the "usual number" of children per family in that
group was from three to five, for all these families
combined were less than a majority. The average
number, therefore, seems to be the only service-
able criterion. Or, if that seems too low, since
a majority of the families considered might be
larger than the average indicates, the highest num-
ber that is found in a considerable proportion of
the families, might be adopted as the standard. In
the group just referred to, the average number
of children per family was 4.3, while the number
in one-third of the families (347) was five or
more. The estimates of a family Living Wage
made on the basis of these two numbers would not

*0p. cit., pp. 577, 578.

121

A LIVING WAGE

be far apart. Hence it is sufficiently accurate to
say that the family that ought to serve as a standard
of measurement in the matter of decent remunera-
tion for the adult male laborer, is one having four
or five children.

Note to Second Edition. — Certain reviewers
have contended that, as the immediate object of the
labor-contract is the work done, this, and not a
family livelihood, is the term to which strict justice
requires the wage to be equivalent. Now, the
"work done" is either to be taken objectively —
divorced entirely from the needs and sacrifices of
the doer,— or it is not to be so taken. In the for-
mer hypothesis, the market rate of wages must al-
ways be regarded as just; in the latter, the "family
needs" of the laborer have as vahd claims to be
considered as have those individual needs which are
not met by the market rate, yet which must be met
if he is to live decently. But the author prefers to
discard the "equivalence" concept entirely, and to
regard the difference between the current rate and
a family Living Wage, as due the laborer in virtue
of his own personal dignity and the distributive
function of the employer. Because of this function,
his generic obligation so to use the resources of the
earth that his neighbors will be able to obtain on
reasonable conditions a decent livelihood therefrom,
becomes a specific obhgation to pay his employees
a family Living Wage. In a sense this obligation
seems to belong to distributive justice ; nevertheless
it is one of strict justice, precisely as is the obliga-
tion of not imposing upon any individual a dispro-
portionate amount of taxes.

122

CHAPTER VII

A Concrete Estimate of a Living Wage

A more precise determination of a "decent livelihood"
necessary. It can be made with sufficient exactness for prac-
tical needs. A decent livelihood may be taken either ab-
solutely or relatively to the conventional needs of a class.
Estimates by various authorities of a decent livelihood in
terms of goods. The slight discrepancies due to different
viev^^points. Detailed statement of the elements of decent
living for every section of the family. Professor Small's
estimate of the minimum money wagt is too high. John
Mitchell's estimate. The cost of living in the home of an
exceptionally economical housewife. The cost of living
as deduced from the expenditures in families in the cotton
industry. A "revised" estimate of $601.03. This estimate
confirmed by an analysis of the condition of families in two
other industries. With a conservative allowance for lost
time, $600 per year is equivalent to $2.10 per day. Con-
clusion that anything less than $600 per year is not a Living
Wage in any city in America, and that this amount is not
sufficient in the largest cities.

According to the argument of the last chapter, a
decent livelihood for the adult male laborer means a
wage capable of maintaining himself, his wife, and
those of his children who are too young to be self-
supporting, in a condition of reasonable comfort.
(Henceforth when the phrase, "a decent livelihood,"
123

A LIVING WAGE

and "a Living Wage," are used without qualification
they are to be understood in this sense.) The ques-
tion naturally arises, what precisely does this imply
in terms of goods or money? Unless an attempt is
made to answer it, the whole discussion of wage-
rights and obligations remains too abstract, too
vague, to be of much practical value. There would,
in fact, be some force to the objection that all the
workingmen of America are even now paid a Living
Wage.

Evidently the question before us cannot be an-
swered with absolute precision. The needs of men
and their powers of making an effective use of a giv-
en amount of goods or money, are too dissimilar to
find a perfectly exact expression in any common de-
nominator. And even if a common rate of wages
would bring precisely the same degree of comfort to
all the families depending upon it, there remains the
supreme difficulty of translating "reasonable com-
fort" into more concrete terms. In all probability
the individual estimates of no body of men, however
competent and well-meaning, would be in entire
agreement. And no prudent person would assert
that a slight deduction from the amount that he re-
garded as certainly sufficient for a decent livelihood
would render the remainder certainly insufficient.
Nevertheless, the question can be answered with suf-
ficient definiteness to safeguard the human dignity
of the laborer and his family, and that is all that any
one cares to know. We can distinguish twilight from
darkness, although we cannot identify the precise
moment when the one merges into the other. Though

124

ESTIMATE OF A LIVING WAGE

we cannot say just when artificial light becomes more
effective than that of the waning day, we usually call
it into service before the approaching darkness
proves notably inconvenient. Thus it is in the
matter of a Living Wage. Some rates of remunera-
tion we know to be certainly adequate, and others to
be no less certainly inadequate. While we may not
be able to put our finger on the precise point of the
descending scale at which the rate ceases to be suffi-
cient, we can approximate it in such a way that the
resulting inaccuracy will not produce notable incon-
venience. We can, at least, define a limit below
which it is wrong to go, while not committing our-
selves to the conclusion that the limit is sufficiently
high. In other words, a wage under the limit would
be regarded as certainly too low, but a wage at the
limit, as doubtful. An estimate of this character can
be so formulated as to have a very high practical
value.

A decent livelihood may be understood either abso-
lutely or relatively. In the former sense it is an
unvarying standard that is applicable to all conditions
of human existence. It takes no account of needs
based on custom or on any subjective appreciation of
the requisites of welfare, nor does it make any al-
lowance for the possibilities of progress. It is
measured solely by man's essential and universal
needs, and describes in general terms the requisites
of normal and reasonable human life. And it may
obviously be either below or above what is known as
the conventional standard of a community. For ex-
ample, the men and women of America could live

125

A LIVING WAGE

decent and becoming lives, absolutely speaking, with-
out wearing shoes during the summer season. On
the other hand, a conventional standard of living,
though satisfactory to the people with whom it ob-
tains, may fall short of the absolute norm. If the
description given in Dicey 's "Peasant State" is cor-
rect a large class of the inhabitants of Bulgaria, ap-
parently contented, do not live reasonable human
lives. * They have not the means of exercising that
minimum of activity, physical, intellectual, and
moral, which should differentiate the life of men
from that of beasts.

While the conditions of existence indicated by the
absolute standard constitute a minimum below which
it is wrong for men to descend, they are not sufficient
for decent living in the case of most civilized com-
munities. Man is everywhere affected by two classes
of needs : objective, or natural ; and subjective, or ac-
quired.

Through the influence of habit or custom he comes
to regard certain of these acquired needs as essential
elements of a decent standard of life. They differ
relatively to different races, communities, ranks and
classes of men, but to the persons among whom they
have been developed they are of vital importance.
Hence a decent livelihood, or a Living Wage, must
conform in a reasonable degree to the conventional
standard of life that prevails in any community or
group. For, in order to live becomingly, men must
possess not only those goods that are objectively
necessary, but in some measure those that they think

* Quoted in Mrs. Bwanquet's "Standard of Life," p. 9.
126

ESTIMATE OF A LIVING WAGE

are necessary. Indeed, the latter may become more
indispensable to decent living than some of the things
that are objective and primary; for men will some-
times procure them at the expense of the others.
Thus, many persons, men as well as women, will de-
prive themselves of necessary food rather than appear
among their neighbors in garments that are not in
accordance with the conventional modes. At any
rate, the inability to satisfy the more important of the
conventional needs always involves a grave injury to
self-respect, and therefore subjects human beings to
hardships that are incompatible with normal and rea-
sonable living. Finally, owing to the development
of new wants, a decent livelihood now may be below
the standard of decency that will prevail ten years
hence. To ignore the newly developed wants then
would be as harmful as to ignore existing wants now ;
hence a Living Wage is relative not only to the com-
munity or class, but to its different stages of develop-
ment.

The content of a Living Wage for the laborers of
America will be described first as a certain quantity
of goods and conditions of living, and then in terms
of money. The following estimates will prove sug-
gestive and helpful :

"Undoubtedly the first moral charge on the na-
tional income is such a sum as is necessary to bring
up a family, providing for health, education, effi-
ciency of work, and the conditions generally of a
moral life. Anything below such a level subjects
human beings to hardships and temptations to which
they should not be exposed, and to conditions in

127

A LIVING WAGE

which men and women are not free but in bondag^e
to physical wants. If the present system, or any
system, did not promise this at some not distant
period, we should have to say, like Mill, that, if
this or communism were the alternative, 'all the
difficulties, great or small, of Communism would
be but as dust in the balance.' " *

"The necessaries for the efficiency of an ordinary
agricultural or of an unskilled town laborer and his
family, in England, in this generation, may be said-
to consist of a well drained dwelling with several
rooms, warm clothing, with some changes of under-
clothing, pure water, a plentiful supply of cereal
food, with a moderate allowance of meat and milk,
and a little tea, etc., some education and some
recreation, and lastly, sufficient freedom for his
wife from other work to enable her to perform
properly her maternal and her household duties. . . .
... .In addition, perhaps, some consumption of al-
cohol and tobacco, and some indulgence in fashion-
able dress are in many places so habitual that they
may be said to be conventionally necessary, since
in order to obtain them the average man and woman
will sacrifice some things that are necessary for
efficiency." ^

Professor Munro defines a Living Wage as, "a
yearly wage sufficient to maintain the worker in the
highest state of industrial efficiency, and to afford
him adequate leisure to discharge the duties of
citizenship." ^

^ Smart, "Studies in Economics," p. 302, note.
- Marshall, "Principles of Economics," Bk. II, ch. IV, sec. 3,
* "Economic Journal," June, 1894, P- 365-
128

ESTIMATE OF A LIVING WAGE

Mr. Devas summarizes the minimum livelihood
that should be guaranteed to all workers thus : the
means of physical existence ; practical possibility of
marriage ; separate homes ; insurance against sick-
ness, old age, and industrial accidents ; and some
access to the treasures of literature, art and cul-
ture. ^

"There is a growing feeling, not confined to
Trade Unionists," say Sidney and Beatrice Webb,
"that the best interests of the community can only
be attained by deliberately securing to each section
of the workers those conditions which are neces-
sary for the continuous and efficient fulfilment of
its functions in the social organism." ^

The Conference on the Christian Organization of
Industry held at Holborn Hall, London, Nov, 29,
1893, interpreted a Living Wage as a remuneration
that would "enable workers to maintain healthy and
human homes."

Professor Patten holds that the workingman has
a right to a home ; to become the head of a family ;
to self-development ; to a share in the social sur-
plus sufficiently large to make him comfortable ;
to the leisure that is necessary for the revival of
physical and mental powers ; to recreation for the
sake of symmetrical development ; to cleanliness in
and about the home ; and to some development of
his sense of the beautiful. ^

According to President Gompers of the American
Federation of Labor, a Living Wage is, "a wage

^ "Political Economy," p. 498, 2d edition.

* "Industrial Democracy," p. 590, ist edition.

* "The Theory of Prosperity," pp. 218-227.

9 129

A LIVING WAGE

which, when expended in the most economical
manner, shall be sufficient to maintain an average
sized family in a manner consistent with whatever
the contemporary local civilization recognizes as
indispensable to physical and mental health, or, as
required by the rational self-respect of human
beings." ^

"In cities of from five thousand to one hundred
thousand inhabitants," says President Mitchell of
the United Mine Workers, "the American standard
of living should mean, to the ordinary unskilled
workman with an average family, a comfortable
house of at least six rooms. It should mean a bath-
room, good sanitary plumbing, a parlor, dining-
room, kitchen, and sufficient sleeping-room that
decency may be preserved and a reasonable degree
of comfort maintained. The American standard
of living should mean, to the unskilled workman,
carpets, pictures, books, and furniture with which
to make his home bright, comfortable, and attract-
ive for himself and his family, an ample supply of
clothing suitable for winter and summer, and above
all a sufficient quantity of good, wholesome, nourish-
ing food at all times of the year. The American
standard of living, moreover, should mean to the
unskilled workman, that his children be kept in
school until they have attained the age of sixteen at
least, and that he be enabled to lay by sufficient to
maintain himself and his family in times of illness,
or at the close of his industrial life, when age and
weakness render further work impossible, and to

^ "The American Federationist," April, 1898.
130

ESTIMATE OF A LIVING WAGE

make provision for his family against premature
death from accident or otherwise.

"This, or something like this, is the American
standard of living, as it exists in the ideals of the

unskilled workingmen For the great majority

of men, who are willing to work and are not in-
capacitated by physical, mental, or moral defects,
the manner of living above described is an approxi-
mate statement of what their standard should be;
and with the great productivity of American labor,
I believe it not unreasonable to say that these things
should now be possessed by every workingman,
however unskilled," ^

Father Vermeersch's estimate of the content of
a Living Wage is as follows : moderate food, cloth-
ing and shelter for the laborer and his family;
festival days and some recreation; proper educa-
tion for the laborer's children; and suitable provi-
sion against accidents, disease and old age. ^

All of these estimates, however various the terms
in which they are formulated, are in tolerably close
agreement, except in the matter of provision for
sickness, disability and old age. The cause of this
discrepancy lies in the different viewpoints from
which the problem is regarded. Writers who have
in mind the requisites of social welfare, as Marshall
and Munro, consider the Living Wage primarily
in relation to the laborer's industrial efficiency.
They do not take account of his needs during the
time when he is unable to work because they are

* "Organized Labor," pp. ii6, 117.
' "Quaestiones de Justitia," p. 576,

131

A LIVING WAGE

not describing what he ought to have as a man, but
what he requires as an instrument of production.
This is, of course, an entirely proper subject of in-
quiry, just as is the cost of keeping a machine in
repair or a horse in a condition of health and
strength, but it has no necessary relation to that
measure of the requisites of living which is due to
the laborer as a man and an end in himself. The
question that we are concerned with is not what a
man must have in order to be a profitable producer,
but what he ought to have as a human being. The
estimates referred to, however, are instructive, in-
asmuch as they indicate that in the long run social
utility and the demands of individual justice are in
substantial accord.

The following is submitted as a rough estimate of
the minimum amount of goods and opportunities
that will suffice for decent living and the rearing of
a family:

I. Food, clothing and shelter for the laborer and
his family until his children are old enough to be-
come wage earners.

(a) The Children. It was stated in the last
chapter that the average number of children found
in the workingmen's families of full growth, is the
only practicable standard for estimating the extent
of the family's needs under this head. A study of
the families for which statistics are presented in the
"Cotton Group" of the Seventh Annual Report of
the Department of Labor leads to the conclusion
that the average number of children in the families
there described in which the mother had reached
132

ESTIMATE OF A LIVING WAGE

the end of the child-bearing period, was 4.4. The
number of famiHes enumerated was 2,132; they
were distributed over seventeen states, North, South,
East, and West, and represented fifteen nationaHties.

Except possibly during school vacation, no child
of either sex should be employed as a wage earner
under the age of sixteen years. Below that age they
are, as a rule, not sufficiently strong to work day
after day under the direction of an employer. Be-
sides, if they are taken out of school earlier they get
less than a fair share of education, and of the indus-
trial opportunities depending upon it. ^

(b) The Wife. The welfare of the whole fam-
ily, and that of society likewise, renders it impera-
tive that the wife and mother should not engage in
any labor except that of the household. When she
works for hire she can neither care properly for her
own health, rear her children aright, nor make her
home what it should be for her husband, her chil-
dren and herself. In the words of the Second
Congress of Christian workingmen at Rheims, "la
femme devenue ouvriere n' est plus une femme."^
Among the associations and individuals that have
protested against the employment of wives and
mothers, or at least of mothers, may be mentioned :
the Union of Catholic Associations and Working-
men of Fribourg, Switzerland (1893) ; the Social
Christians of Germany; the Christian Democrats of
Belgium (1894) ; the Catholic Association of Hol-
land (1897) ; the Second Congress of Christian

^ Cf. "Poverty," by Robert Hunter, ch. V.
" "The wife become wage worker is no longer a wife."
Quoted in Turman's "Le Catholicisme social," p. 55.
133

A LIVING WAGE

Workingmen at Rheims (1894) ; the Catholic dele-
gates to the Industrial Congress for the Protection
of Workingmen at Zurich (1897); the Count de
Mun ; and Cardinal Manning. *

(c) Food. The laborer should have food suffi-
cient in quantity, quality and variety to maintain
himself and the members of his family in a normal
condition of health and vitality.

(d) Clothing. He should be able to provide him-
self and family with clothing adapted in quantity
and quality to the reasonable requirements of com-
fort. In addition to being protected against the in-
clemency of the climate, they ought to have the
means of appearing in becoming attire on "social"
occasions, in school, in church, and in public gath-
erings. It is impossible to state precisely the mini-
mum that is reasonable for this purpose, but speak-
ing generally we may say that the laborer and his
family should possess an outfit of "holiday" apparel,
distinct from their ordinary or "everyday" gar-
ments. This is essential to enable them to appear
among their fellows without hurt to that self-respect
and natural pride which are indispensable to decent
living.

(e) Shelter. Under this head it is sufficient to
say that the dwelling occupied by the laborer and
his family ought to consist of at least five rooms,
and in general conform to the requirements of rea-
sonable comfort. Three rooms (one for the par-
ents, one for the male and one for the female chil-
dren) are the minimum for sleeping accommoda-

^ Idem, pp. 50-58.

134

ESTIMATE OF A LIVING WAGE

tions, and it would seem that at least two rooms are
required for all other purposes. As to equipment,
the house must, of course, be provided with a rea-
sonable stock of furniture and utensils, and with the
amount of heat, light and drainage essential to
health and comfort.

The material requisites of decent living may,
therefore, be summed up as a reasonable amount of
food, clothing and shelter for himself and his wife
as long as they live ; and for four or five children
until these have reached the age of sixteen years.

2. Besides the needs that are constant, actually
existent, there are others that are intermittent, and
still others that will be felt only in the future. The
laborer's remuneration ought to be sufficiently large
to enable him to provide against accidents, sickness
and old age. If it does not he will, when tempo-
rarily or permanently incapacitated for work, be-
come a burden on the community or on his children.
In the latter case the wages received by the children
would have to be increased beyond their own re-
quirements. This is not in accord with the normal
order of things, which suggests that a man's life
toil should bring him sufficient provision for his
life needs.

3. Finally, the laborer and his family have cer-
tain mental and spiritual needs, the satisfaction of
which is essential to right living. The chief among
them are: a moderate amount of amusement and
recreation; education in the primary branches of
instruction for the children; some periodical and
other literature; membership in certain organiza-

135

A LIVING WAGE

tions, such as benefit societies and Labor Unions ;
and last, but by no means least, the means c>f fulfill-
ing in a becoming manner the obligations imposed
by charity and religion.

Food, clothing, shelter, insurance, and mental and
spiritual culture — all in a reasonable degree — are,
therefore, the essential conditions of a decent live-
lihood. Remuneration inadequate to secure all of
these things to the laborer and his family falls be-
low the level of a Living Wage.

How shall we express these requisites in terms of
money? The varying cost of living at different
times and in different sections of the country is alone
sufficient to render a single general answer exceed-
ingly difficult. Nevertheless, an approximation can
be made that will appeal to all fair-minded men as
conservative and just, and will indicate with con-
siderable definiteness an ideal of practical and
practicable justice that, alas ! is yet very far from
being realized.

Professor Albion W. Small, who is at the head
of the Department of Sociology in the University
at Chicago, and who is one of the leading author-
ities of the world in that science, declared a few
years ago: "No man can live, bring up a family,
and enjoy the ordinary human happiness on a wage
of less than one thousand dollars a year. . . .All wa-
ges should be paid within a certain scale. Let no man
be paid less than the purchase capacity of one thou-
sand dollars, which, I think, is the least a man can live
on comfortably, educate his children, provide com-
fortably for a family, and enjoy some human com-
136

ESTIMATE OF A LIVING WAGE

forts. Let no man be paid more than fifty thousand
dollars, which is the salary of the President of the
United States."^

The Statistics presented in the Sixth, Seventh
and Eighteenth Annual Reports of the U. S. Bureau
of Labor indicate that Professor Small's estimate
is not too high if two conditions be verified : first,
that, as he would wish, women and minors do not
become wage earners ; and, second, that the laborer
and his family be enabled to approach a certain de-
gree of variety and fulness of life which is not ab-
solutely required for what most men would regard
as a reasonable and comfortable level of existence.
To support his children, both boys and girls, from
the years of sixteen until twenty-one, and his
daughters from the latter age until they marry,
would add very much to the cost of the family's
living as above formulated. It is more than prob-
able that society and, generally speaking, its women
and minors, would be benefited if these were ex-
cluded from the ranks of the wage workers. Boys
would have greater opportunities of general educa-
tion and special industrial training, and girls would
necessarily be better equipped for and more willing
to accept woman's true functions, those of wife,
mother, mistress of the home, and moulder of the
moral and spiritual life of the race. Moreover, the
withdrawal of these two classes from the field of
paid employments would, by eliminating a most
demoralizing and intractable form of competition,

^ Lecture delivered before the Central Y. M. C. A. of
Chicago, as reported in the "Chicago Chronicle" of Dec. 13,
1901.

137

A LIVING WAGE

bring about a general rise in the wages of men which
would go very far toward making actual the ideal
of Professor Small. However, it must be admitted
that this condition, however much to be desired,
cannot in any accurate use of language be described
as indispensable to right and reasonable living.
Similarly with the added amount of general comfort
that a wage of one thousand dollars per year would
probably insure: the laborer would be greatly
benefited by it ; for he is a man, and man's capacity
for progress is infinite; but our concern here is
merely with the reasonable and irreducible mini-
mum.

Mr. John Mitchell estimates the minimum wage
that will maintain a workingman and his family
according to the "American standard," as $600 a
year. "It is, of course, true that this estimate ap-
plies more exactly to workmen in towns of from five
thousand to one hundred thousand inhabitants, than
it does to other places. In speaking of $600 for
unskilled workmen, I do not mean to include farm
hands or men in rural communities, where the cost
of living is less and the standard of Hving not so
high. On the other hand, in cities of over one hun-
dred thousand, and especially in cities of over half
a million, $600 would, in my opinion, be insufficient
to maintain this standard for unskilled workingmen.
This is more especially true of the city of New
York, where the cost of maintaining a fair standard
of living would be much greater, owing to excessive
rents, and where the ideal of a separate small house
for the workman must itself be given up. For the
138

ESTIMATE OF A LIVING WAGE

great mass of unskilled workmen, however, resid-
ing in towns and cities with a population of from
five thousand to one hundred thousand, the fair
wage, a wage consistent with American standards
of living, should not be less than $600 a year." ^

On page 688 of the Sixth Annual Report of the
Commissioner of Labor, there is a letter from Mrs.
J. E. B., the wife of a workingman. The family is
seven in number, and therefore may be regarded as
normal. The earnings of the husband amount to
$576 per year. In her letter the wife gives a de-
tailed account of the average family expenditures
for all purposes except clothing and sundries, and
describes at some length her truly ingenious planning
to economize in the matter of food. It is safe to
say that seven out of ten housewives would be un-
able to show as large results for the same outlay.
Yet she is obliged to confess that in her efforts to
make both ends meet she is like "the kitten that
twirled round and round trying to catch its tail."
The object sought was always in view, but never
within reach. Any humane man or woman who
will peruse carefully this interesting and instructive
letter will be forced to the conclusion that, among
the goods and opportunities enjoyed by the members
of this family, not one was in excess of the bare
requisities of decent Hving, and that the cost there-
of ($576) was less than it would be in the majority
of households.

The following is an itemized statement of the
average cost of living for one year of 2,132 families

^"Organized Labor," pp. 117, 118.
139

A LIVING WAGE

described in the Seventh Annual Report of the Com-
missioner of Labor, pages 1678- 1682. The average
size of these famiHes is 5.7, which is somewhat less
than the number that we have taken to be normal.

Food $287.06

Rent 72.58

Fuel 3575

Lighting 4.90

Clothing 107.40

Taxes 5.43

Insurance (property) 6.47

Insurance (life) 20.22

Organizations (labor) 6.06

Organizations (other) 6.60

Religion 10.29

Charity 2.80

Furniture and Utensils 19-79

Books and Newspapers 5.35

Amusements and Vacations 9.36

Intoxicating Liquors 15-98

Tobacco 10.48

Sickness and Death 22.31

Other Purposes 38.19

Total for all Purposes $687.02

The total average expenditure of the families in-
cluded in this summary is stated in the Report to be
$610.61, instead of the figure just given. The
discrepancy arises from the fact that hundreds of the
families investigated made no outlay on account of
several of the items specified in the list, or that their
140

ESTIMATE OF A LIVING WAGE

expenditures under some heads were not included
in the computations of the Report. For example,
the expenditure for insurance on property is given
for only 198 families ; the average contribution to
labor organizations is based on reports from only
155 families, and so on. Hence the total actual
expenditures of all the families, for all purposes,
divided by their number (2,132) gave $610.61, in-
stead of $687.02. The latter sum would constitute
the actual average if the families that expended noth-
ing (or whose expenditures were not taken into
account) for certain of the items specified, paid out
under these heads as much as did those families
whose accounts were included in the Report. This
is a legitimate method of computation, since all of
the purposes indicated in the list are necessary ele-
ments in the cost of living. It was the total yearly
outlay of such families as met all these wants,
not the expenditures of those that were unable to
meet some of them, that was normal. Let us examine
briefly the separate items, to see whether any of them
ought to be dispensed with, increased, or dimin-
ished, in estimating the content of a Living Wage.

The average expenditure for food was $287.06.
In all of the Northern states but one, and in two
of the states south of Mason and Dixon's Line, the
average was considerably above this sum. On the
other hand, the average food account in the family
that we have considered in particular (that of Mrs.
J. E. B.) was only $220.62. With regard to this
difference of $66.44, it is to be noted that the ma-
141

A LIVING WAGE

jority of housewives are less competent managers
than this lady, and that, despite her exceptional
economizing, her family did not have a reasonable
amount of healthful, nourishing food. Hence it
seems fair to add some fifteen dollars to her ex-
penditures under this head, making the reasonable
minimum $235.00, which is still $52.06 less than
the sum in the list of the Labor Report.

The annual outlay for rent in our list is $72.58.
The average number of rooms per family repre-
sented by this expenditure was 4.7, which is certain-
ly the minimum that is consistent with the require-
ments of comfort, health and decency. In all the
Southern States but one, the rent cost was below
this average of $72.58, but the houses which hired
for this amount averaged only 3.4 rooms each.
Moreover, it must be borne in mind that all the
dwellings concerned were occupied by operatives in
the cotton industry, and therefore situated in towns
or smaller cities, where rent is considerably lower
than in the great centers of population. To get
anything like a fair, general average cost of decent
housing, we must increase this figure to $84.00.
That is only seven dollars per month, which, if any
reliance may be placed on ordinary experience, is
less than five-room houses can be obtained for in
most instances.

For fuel the average expenditures of the families
in the Report was $35.75. It cost Mrs. J. E. B.
only $24.00, but she was able to buy coal at two
dollars per ton. This is notoriously less than the
retail price of that commodity (even the "soft"

142

ESTIMATE OF A LIVING WAGE

varieties) in most localities. However, let us re-
duce the list figure to $30.00.

"Lighting, $4.90," is surely a sufficiently low esti-
mate.

"Clothing $107.40," with the average number of
children 3.5 per family, while the average number in
families of full size is, as already noted, four or five.
The parents of the families entering into the Report
were of various ages of matrimonial existence, from
the recently wedded upward. The average number
of children per family, and the average cost of
clothing them, was consequently smaller than would
have been the case if all the couples had been married
some sixteen or seventeen years. It is obvious that
the maximum present cost of rearing a family is
not reached before that period. Nevertheless we
shall allow the above figures to stand unchanged.

"Taxes, $5.40." Nearly one-half of the families
investigated made no returns for this account. Let
us reduce the amount to $3.00.

"Insurance on property, $6.47." This seems
sufficiently low, but we shall make it $5.00.

"Life Insurance, $20.28." Let this be entirely
eliminated on the assumption that from the time of
his majority until his family attains its full numeric-
al size, and between the period at which the first of
his children becomes self-supporting and that at
which he ceases to work himself, he will put by
enough to provide for his old age. His living ex-
penses will, of course, be smaller during these two
intervals than when he has to support four or five
children. We shall also assume that his total sav-

143

A LIVING WAGE

ings are sufficient to cover the annual expenditure
for "Sickness and Death," which, according to the
Report, is $22.21. As human nature goes, this
places upon the laborer an apparently unreasonable
burden, but in order to guard against even the ap-
pearance of generosity, we shall let it remain.

"Labor Organizations, $6.06" ; "Other Organiza-
tions, $6.60." When we recall the imperative
necessity of Trades Unions, and when we reflect that
"other organizations" include social and mutual-
benefit associations, we are bound to conclude that
these figures could not well be reduced.

"Religion, $10.29" ; "Charity, $2.80." Both items
seem very small.

"Furniture and Utensils, $19.79," — ^^ irreducible
minimum.

"Books and Newspapers, $5.35." Schoolbooks
for the children are included in this amount. It is
a ridiculously small expenditure for the intellectual
life of an American family in the twentieth cen-
tury. It may reasonably be raised to $10.00.

"Amusements and Recreation, $9.36." This is
about one-third of the expenditures for these pur-
poses by the same class of laborers in Europe. ^ It
ought to be at least $20.00.

"Intoxicating Liquors, $15.98." Let us reduce
it to $10.00.

"Tobacco, $10.48." Reduced to $8.00.

"Sickness and Death, $22.31." As already stated,
we assume that the laborer makes provision for

^ "Seventh Annual Report of the Department of Labor/' p.
852.

144

ESTIMATE OF A LIVING WAGE

these needs from his savings during the earHer years
of his adult life.

"Other Purposes, $38.19." To one who reflects
for a moment on the numerous possibilities of legit-
imate expenditure that must come under this head,
the figure given will seem incapable of further re-
duction.

A "revised list" of the minimum annual expendi-
tures of a workingman's family would, therefore,
take the following proportions :

Food $235.00

Rent 84.00

Fuel 30.00

Lighting 4.90

Clothing 107.40

Taxes 3.00

Property Insurance 5.00

Labor Organizations 6.06

Other Organizations 6.60

Religion 10.29

Charity 2.80

Furniture and Utensils 19-79

Books and Newspapers 10.00

Amusements and Vacations 20.00

Intoxicating Liquors 10.00

Tobacco 8.00

Other Purposes 38.19

Total for all purposes $601.03

The Sixth Annual Report of the Commissioner of
Labor presents the results of an investigation into
10 14s

A LIVING WAGE

the cost of living in the coke and iron ore indus-
tries. ^ The average yearly expenditure for all pur-
poses of 249 families in the former industry was
$462.69; of 165 families in the latter, $390.93.
These costs are obtained by dividing the number of
families in each group (249 and 165) into the total
amount annually expended by the group. As we
found to be the case in the cotton group, so here,
the dividend, that is, the grand total of expenditures,
is lessened by the fact that many of the families
paid out nothing under the head of some of the
items represented in said total. For example, only
211 of the 249 families in the coke group paid rent;
of the remaining thirty-eight, five failed to send in
reports to the investigators, and the other thirty-
three owned the houses in which they resided. If
these thirty-eight had paid the average rent paid
by the 211 the total outlay entering under the
head of rent into the grand total, would have been
to that extent increased (38 times $58.19). A
similar observation is to be made concerning all
but two of the other purposes of expenditure;
not one of them appears in the expense accounts
of all the families. The pertinent fact for our
study revealed by the statistics of the coke group,
is that a family which would annually spend for
all of the purposes represented in the grand total
the average amounts that actually were spent by
those families that spent anything therefor, would
have living expenses of $562.94, instead of $462.69.
And every one of these purposes of expenditure

'Pp. 1300-1311.

146

ESTIMATE OF A LIVING WAGE

forms a necessary part of a reasonable standard
of living. Moreover, the average size of these
families was only 4.8 members ; the outlay per
family on several of the accounts was palpably in-
sufficient— rent being only $58.19, and representing
only 3.4 rooms per family; and, in general, the in-
dividual and detailed descriptions of those families
paying rent, numbering more than five persons each,
and expending less than $600 per year, shows that
they lacked the requisites of reasonable comfort. *
With regard to the families in the iron ore group,
it must be observed: first, that by computing their
cost of living according to the method just em-
ployed, we get an annual expenditure of $459.32,
instead of $390.93; secondly, there were only 5.2
persons per family, the yearly outlay for rent was
only $33.11, the houses ( ?) numbered only 3.4 rooms
each, and many of the other costs, notably under the
heads of food, clothing, religion, were entirely too
low; and, thirdly, what has been said concerning
those families of the coke group with a rent account,
more than five members each, and a total outlay of
less than $600 annually — may be asserted with
emphasis regarding similarly placed families in the
iron ore industry — with the possible exception of
those fortunate enough to own a vegetable garden,
or cows, hogs, poultry, etc. ^ Hence the records
of these two groups of families, whose cost of living
was apparently so much lower than that of the fam-
ilies in the cotton industry, in reality confirms the

ipp. 1107-1135.
^'Pp. 1145-1165.

147

A LIVING WAGE

conclusion that a normal family cannot live decently
on less than $600 per year.

Partly because of difficulties inherent in the situa-
tion, and partly because complete and definite sta-
tistics are lacking, it is impossible to state in terms
that will be universally valid the equivalent of $600
per year in daily wages. The reports of the Penn-
sylvania Bureau of Industrial Statistics show that in
forty-seven industries investigated, the percentage
of time during which the men were out of work
varied from fifteen in 1893, to three in 1898. The
New York Bureau of Labor Statistics exhibits the
rate of the unemployed among organized workmen
(where it is usually less than among the unorgan-
ized) from 1897 to 1901, as varying from nine per
cent, to twenty-five per cent. ^ The Massachusetts
Labor Report of 1887 placed the average unem-
ployed of that state in 1885 at ten per cent.,
and the Commissioner of Labor of Illinois estimated
it as twenty-five per cent, in his state in the year
1886. ^ Mr. Spahr is of the opinion that, "it is a
prosperous year indeed when the average wage-
receiver aggregates forty-four full weeks of employ-
ment." ^ That would make the percentage of lost
time fifteen. Levasseur, however, declares that,
"the average deduction which must be made for
lost time is about ten per cent, under ordinary
circumstances." * The widest investigation of

* Cf. Final Report of The Industrial Commission, p. 733.

* Cf. Charles B. Spahr's "Present Distribution of Wealth in
the United States," pp. 100, loi.

' Op. cit., p. loi.

* "The American Workman," p. 399.

148

ESTIMATE OF A LIVING WAGE

this question is the one made for the Twelfth
Census, which covered every occupation in the
United States. The returns show, not the average
amount of time lost by each worker, but the number
and per cent, that were idle during any portion of
the year, and the per cent, of these that were un-
employed during a part or all of different groups
of months. For example, of those engaged in the
manufacturing and mercantile industries 28.3 per
cent, were unoccupied for some part of the year : of
these 46.5 per cent, lost from one to three months ;
42.2 per cent, from four to six months; and 11.3 per
cent, from seven to twelve months. ^ A conserva-
tive computation from this table of returns indicates
that the percentage of unemployment for all occupa-
tions except agriculture and the professions, during
the year covered by the investigation, 1899 and 1900,
averaged between eight and ten per cent. And those
years were unusually prosperous. However, if we as-
sume that the average workingman loses only eight
per cent, of his possible working time — about 310
days per year, exclusive of legal holidays — an annu-
al income of $600 would mean a daily w^age of
$2.10. In case employment is absolutely uninter-
rupted, these rates are equivalent to $1.94 per day.

Since our estimate of $600 is based on the cost of
living of families in the cotton industry in the year
189 1, it is undoubtedly too low to serve as a stand-
ard for the whole country at all times. House rent,
car fare, recreation, social position, would make
living dearer in the large cities than in the smaller

* Volume on "Occupations," p. ccxxxv.
149

A LIVING WAGE

centers of population in which these families resid-
ed. In New York, or Boston, or Chicago, $600
would not, even during periods of low prices,
obtain the irreducible minimum of necessaries
and comforts described in our "revised list." It
would not command that amount of goods to-day^
in those towns in which the figures of the original
list were gathered ; for the cost of living was six
per cent, less in 189 1 than in 1903. ^ The conclu-
sions that seem to be abundantly justified by the
facts brought out in this chapter may, therefore, be
stated as follows: first, anything less than $600 per
year is not a Living Wage in any of the cities of
the United States ; second, this sum is probably a
Living Wage in those cities of the Southern States
in which fuel, clothing, food and some other items
of expenditure are cheaper than in the North ; third,
it is possibly a Living Wage in the moderately sized
cities of the West, North and East; and fourth, in
some of the largest cities of the last-named regions,
it is certainly not a Living Wage.

Note to Second Edition. — According to care-
ful studies and estimates made by several groups of
investigators in 1906, the minimum cost of decent
living for a family of moderate size was : in New
York, $950; in Chicago, $900; in Baltimore, $750;
while the average for these and several other large
cities was $938.

* October, 1905.

^See Bulletin No. 53 of the Bureau of Labor, pp. 712, 723.

ISO

SECTION III

ECONOMIC FACTS BY

WHICH THE RIGHT

IS CONDITIONED

CHAPTER VIII

The Underpaid Laborers of America: Their
Number and Prospects

Place of this and the following chapter in the discussion.
No complete statistics of the underpaid obtainable. Partial
statistics showing the proportion in several industries at
the beginning and end of the last decade. Conclusion, that
at least 60 per cent, of the male adults get less than $600
per annum. Wages have greatly increased since 1850, but
not so rapidly in the last 25 years as in the preceding 30
years. The forces that have restricted, and seem likely to
continue to restrict, the upward tendency of wages are:
(a) monopolistic combinations, which can dispense with
a considerable amount of labor power; (b) the rapid dis-
placement of men by machines; (c) the unnecessary multi-
plication of productive instruments, causing overproduction
and unemployment. Mr. Hobson's analysis of this phe-
nomenon. It may be operative at all times except those of
unusual industrial activity. Fallacy of the older theory
which affirmed the impossibility of general over production.
Combined effect of the three forces described. Summary
and conclusion.

The endeavor of the foregoing chapters has been
to show that the laborer has a right to a Living
Wage, and to state the content of this right in terms
of goods and money. The correlative obligation
rests, it has been declared, "on the members of the
industrial community in which the laborer lives."
153

A LIVING WAGE

The next step would naturally be an attempt at a
more specific definition of the phrase just quoted.
Before entering upon this task, however, we shall
try to get some idea of the proportion of American
adult laborers that to-day fails to receive a Living-
Wage, and to ascertain whether this proportion is
likely to change in the near future. This inquiry
will form the subject matter of the present chapter.
In the chapter immediately following we shall strive
to answer the question which asks whether the
natural resources and productive powers of the
country are sufhcient to afford a Living Wage to all
its inhabitants. The discussion of these questions
will make the whole treatise more concrete, and
will give it more practical significance. As used
hereafter, the phrase, "underpaid laborers," refers
to adult male workers whose remuneration is less
than $600 per year.

No investigation has ever been made which shows
the total number of workingmen in the United
States employed at any given rate of wages. There
was, indeed, an attempt in this direction by the offi-
cials in charge of the Eleventh Census, but it was not
successful. From the results of various partial in-
vestigations, however, we can form a fairly accurate
and sufficiently definite estimate of the number and
proportion of the underpaid.

The Eleventh Census (1890) gives the weekly
rates of wages and the number of persons employed
at each rate in fifty leading industries of 165 cities. ^
The investigation from which these results were ob-

'Part II of the Report on Manufactures, p. xxix.
154

UNDERPAID LABORERS

tained was the most extensive of its kind that has
ever been made, as it covered one-fourth of the em-
ployees in the manufacturing and mechanical in-
dustries. The number of establishments investigated
was 44,225, and the number of males sixteen years
of age and over whose rates of wages were obtained
was 757,865. None of the reports of the Eleventh
Census gives the number of employees who were
above twenty-one years, nor the number of those
between sixteen and twenty-one ; but from the tables
of the Twelfth Census we learn that in 1900 the
proportion of males sixteen years of age and over
in manufacturing and mechanical pursuits who
were minors, was eleven per cent. ^ If the same
proportion existed in 1890, and if all the minors
were among the 407,693 workers who received less
than twelve dollars per week, forty-eight per cent,
of the male adults failed to get a Living Wage. ^
But the wage returns upon which this estimate is
based represent not merely wage receivers in the
ordinary sense, but also company officers and firm
members. According to the Eleventh Census, the
average income of males above sixteen in the manu-

* Volume on "Occupations," p. cxlii. That is to say, the
minors formed ii per cent, of the whole number of males, —
laborers, employers, and company officers, — above i6 years of
age in these occupations. They were, consequently, a slightly
higher percentage of the laborers alone, but the difference is so
small that it may safely be disregarded.

^ The assumption that all minors and women are in the
underpaid class is made in the case of every group of employees
considered in this chapter. The effect is to make the propor-
tion of male adults in the class slightly less than it actually is,
since some women and minors certainly get more than $600 fer
year. But there is no other available method of even approx-
imately distinguishing the wages of adult males.

155

A LIVING WAGE

facturing and mechanical industries was nine per
cent, higher when the latter classes were included
than when they were omitted. Taking account of this
fact and of the number of income receivers appearing
in the highest paid group in the table that we are
considering, we may safely conclude that the per
cent, of adult male wage earners getting less than
twelve dollars weekly was at least fifty-one.

The Seventh Annual Report of the Commissioner
of Labor indicates that eighty-four per cent, of
17,650 employees in typical establishments in the
iron and steel industry received in 1891 less than
$2.01 per day.^ According to the Twelfth Census,
seventeen per cent, of this class of workers in 1900
were females and boys. ^ Assuming that the same
percentage obtained nine years previous, we find the
proportion of underpaid adults among the iron and
steel workers at that time to be eightv-one per cent.

The Fifth Annual Report of the Commissioner
of Labor presents the rates of wages paid to railway
labor in 1889.^ Of the 224,570 employees repre-
sented eighty-six per cent, received less than $2.01
per day. When eight per cent, is deducted on ac-
count of females and boys the proportion of adult
males that failed to get this rate appears as eighty-
five per cent. *

In the special report of the Twelfth Census (1900)

»Pp. 840, 841.

^Volume on "Occupations," p. cxlii.

3 P. 83.

* As in the case of the iron and steel workers, the percent-
age of women and minors is assumed to be that prevailing when
the Twelfth Census was made. See the volume of the latter
on "Occupations," p. cxlii.

156

UNDERPAID LABORERS

on "Employees and Wages," returns are presented
from what was undoubtedly the most careful in-
vestigation that has yet been made of the rates of
wages obtained by different classes of workers. ^
Representative establishments were studied in thirty-
four "stable and normal industries," classified under
the more general heads of textile, woodworking, met-
alworking, and miscellaneous. As the chief purpose
of the investigation was to show the movement of
wages in the manufacturing industry between 1890
and 1900, statistics were obtained for both of these
years. The returns for 1890 indicate that sixty-nine
per cent, of 105,106 males sixteen years of age and
over received less than $12.50 per week. ^ Allowing
eight per cent, for lost time, this is less than $600
annually. When eleven per cent, is deducted on
account of minors the proportion of underpaid adult
males appears as sixty-six per cent.

So much for the wages prevailing in 1889, 1890,
and 1891. Of the condition of industry in 1900 the
report on "Manufactures" of the Twelfth Census
says : "It was a time of special activity and produc-
tivity of manufactures" ; "the volume of industry
had nearly reached its high-water mark" ; and
furthermore, "the same general conditions prevailed
in 1890" ; "there has been no decade in which busi-
ness conditions were so nearly alike at its beginning
and at its end." ^ The language of the Census Re-
port is confirmed by the "Aldrich Report" and the
monthly Bulletins of the Bureau of Labor, which

> Pp. 2-779.
2 Pp. 2-614.
'Part I, p. lix.

157

A LIVING WAGE

show that in 1889, 1890, and 1891 the general level
of wages was higher than the average of the decades
immediately preceding and following. ^

The special investigation discussed in the last
paragraph but one, found that sixty-eight per cent,
of 160,267 males of sixteen years and over were
paid less than $12.50 per week in 1900. ^ Eliminat-
ing eleven per cent, for minors, we see that the
proportion of adult males that failed to get a Living
Wage in typical establishments in the manufactur-
ing industry was sixty-four per cent.

Another table based upon this same investigation,
containing returns from some establishments not
represented in the table just considered, and omit-
ting some of those included in the latter, discloses
the fact that sixty-six per cent, of 156,552 males six-
teen years and over obtained less than $12.50 per
week. ^ With eleven per cent, deducted for minors,
the proportion of underpaid male adults in this group
in 1900 was sixty-two per cent.

According to the Thirteenth Annual Report of
the Interstate Commerce Commission on the Sta-
tistics of Railways, eighty-two per cent, of the 1,008-
068 persons, exclusive of officers, in this industry
in 1900 received at that time wages that averaged
less than $2.05 per day. * The Sixteenth Annual
Report of the Commission shows that in 1903 sixty-
nine per cent, of the 1,302,494 railway employees —
officers of the roads again being excluded — obtained

* Cf . Ely, "Evolution of Industrial Society," pp. 112, 113.
^"Employees and Wages," pp. 2-614.
® "Employees and Wages," pp. 616-779.

^ Pp- 34, 40-

IS8

UNDERPAID LABORERS

average wages of less than $2.09 daily. ^ Eliminat-
ing eight per cent, on account of women and minors,
we see that the average per cent, of underpaid adult
males for the two years was seventy-two. It must
be noted that this estimate is based on the Commis-
sion's statement of the average rates paid to the
different classes of employees, and consequently that
many individuals in some of the classes in which the
average level was below $2.10 per day, received a
higher remuneration. On the other hand, many
members of classes whose average was above that
rate obtained less. Probably one group balances the
other.

A partial confirmation of these estimates of the
proportion of underpaid male adults at the begin-
ning and end of the last decade of the nineteenth
century is obtained from statistics presented by sev-
eral of the state labor bureaus. A noteworthy fea-
ture of these returns is that they represent a much
larger proportion of all the employees in their re-
spective states than do the foregoing statistics with
regard to the country at large. Moreover, they are
all from states in the North and West, in which
wages are at least up to the average rates for the
whole United States. Only a summary will be given
of the estimates based on state statistics. For the
sake of a more satisfactory and comprehensive view
of the entire field, the table includes a summary of
the estimates already given in detail.

» Pp. 38,43.

159

A LIVING WAGE

Number Per Cent,
of Adult of Adult
Employees and Years Males Males

Represented: Represent- Under-

ed: paid:

n 50 Manufac. Industries, 1890,^ 757365 51
n Iron and Steel, 1891,^ 17,650 81

n Railway Occupations, 1889,^ 206,604 85
n 34 Manufac. Industries, 1890,* 93.544 66
n 34 Manufac. Industries, 1900,^ 142,638 64
n 34 Manufac. Industries, 1900,^ 138,331 62
n Railway Occupations,

1900 and 1903,^ 2,125,717 72

n Manufac, Mass., 1890 and 1891,® 367,311 59
n Manufactures, Wis,, 1891,® 70,326 61

n Manufac, Minn., 1899 and 1900,^° 99,872 53
n Manufac, Mass., 1899 and 1900, 511,727 64
n Manufac, Wis., 1899, 1900, 1901," 217,522 75
n Manufac, N. J.,

1899, 1900, 1901,^* 387,903 60

En Manufac, III, 1900 and 1901,^* 135,890 58
No attempt is made to estimate the total number
of underpaid workers represented in the table, be-
cause many of them are counted more than once in

^ Eleventh Census, "Manufactures," Pt. II, p. xxix.

* Seventh Annual Report of Com. of Labor, pp. 840, 841.
^ Fifth Annual Report of Com of Labor, p. 83.

* Twelfth Census, "Employees and Wages," pp. 2-614.

* Ibidem.

' Idem, pp. 616-779.

' Thirteenth & Sixteenth Reports of Interstate Com. Com-
mission, pp. 34, 40 ; 38, 43.

* Annual Statistics of Manufactures for 1891.
"Report of Bureau of Labor Statistics for 1891-92.
"Report of Bureau of Labor for 1899-1900.
"Annual Statistics of Manufactures for 1900.
'^Report of Bureau of Labor Statistics for 1900-01.
"Reports of Bureau of Labor Statistics for 1900 & 1901.
"Report of Bureau of Labor Statistics for 1902.

160

UNDERPAID LABORERS

the summaries, and the entire number represented
is small relatively to the whole number of underpaid
in the United States. The important feature of the
table is the percentages, which may be taken as fair-
ly representative of average wage conditions in
manufacturing and railway industries. And the
general level of remuneration in these two fields is
undoubtedly quite as high as the average of all the
other urban occupations. It is to be noted, more-
over, that these precentages reflect the conditions
of 1890 and 1 900- 1 903, when wages were about as
high as they are at present (1905) fully as high as
the average of the last fifteen years, and higher than
that of the last twenty-five years.

The majority of the percentages are above sixty,
while the only notable percentage below that figure
is the first one in the table. The Eleventh Census
indicates that only fifty-one per cent, (approximate-
ly) of the male adults employed in manufacturing in-
dustries in 1890 received less than twelve dollars per
week. Yet the special investigation undertaken by
the director of the Twelfth Census shows that the
proportion obtaining under $12.50 per week in the
same industry the same year, was sixty-six per cent.
The investigation from which the smaller figure was
drawn covered a much larger number of men than
did the one just mentioned, but there is every reason
to believe that it was less scientifically and carefully
carried out. Moreover, investigations of the manu-
facturing industries of Massachusetts and Wisconsin
for this same year 1890 developed the fact that the
percentages of underpaid in these states were re-

II 161

A LIVING WAGE

spectively fifty-nine and sixty-one. It is probable
therefore that sixty-six per cent, is nearer the actual
figure than fifty-one. When due weight is given to
all the percentages in the table the conclusion seems
justified that at least sixty per cent, of the adult male
workers in the cities of the United States are to-day
(1905) receiving less than $600 annually.^

What of the future ? Do the wages of the poorest
paid classes show any tendency to increase? All
students of the subject admit that wages as a whole
have greatly increased since 1850, The necessaries
and comforts of life, on the other hand, seem to be
at about the same price-level that prevailed at that
date.^ The net result, therefore, is a considerable
improvement in the condition of the laboring classes
generally, since the middle of the last century.

There are, however, serious reasons for thinking
that the upward movement of wages has been much
smaller during the last twenty-five years than it was
during the preceding thirty years. The census of 1890
gives us no definite information concerning the
course of wages during the decade immediately pre-
ceding that date, because it differed in the scope and
form of its inquiry from the census of 1880. Hence

^ Writing in the "Annals of the American Academy of
Political and Social Science," September, 1904, Mr. Wm.
English Walling estimates that more than two-thirds of the
male adult laborers fail to get $600 per year, but his argument
is not altogether conclusive.

^According to the Aldrich Report (pp. 8, 9) the cost of
living (rent excluded) was considerably higher in i860 than in
1850, but there was a decline of 5.6 per cent, from i860 to
1891. Between the latter year and 1903, it rose (rent again
excluded) 6.3 per cent. (Bulletin No. S3 of the Bureau of
Labor, p. 72^.) Since 1903 prices have fallen somewhat.

162

UNDERPAID LABORERS

we are warned by those in charge of the former that
the wage statistics of the two censuses can not be
compared. ^ The Aldrich Report declares that the
rise in wages during this decade amounted to twelve
per cent,^ This estimate has been severely criticized.
It has been asserted that the establishments selected
for investigation were not truly representative of
their respective classes. For example, one dry goods
store and one grocery store, employing together less
than thirty clerks, were taken as typical of the whole
retail business ; and the exceptionally high wages
that they paid, as representative of the remunera-
tion of the whole of this class of workers. Again,
it is charged that the statisticians who summarized
the returns of the investigation were in sympathy
with its political aim, which was to show the great-
est possible increase in wages.^ Thus, in computing
the average wages paid in a certain brewery — the
only establishment in that industry from which
returns had been secured — they put the head brewer,
who received $23.96 per day, in a series by himself.
He was, accordingly, given as much weight in deter-
mining the average for the whole establishment as
each one of the other classes of workmen. One of
these classes contained thirty-three men. In conse-
quence of this method, the average wage of the
brewery appeared as $4.12 per day, although a ma-
jority of the employees actually received less than
two dollars. A further and more far reaching result

^"Abstract of the Eleventh Census," p. 139.
2 P. 14.

*Cf. Spahr, "Present Distribution of Wealth in the
United States," p. 106, sq.

163

A LIVING WAGE

was that the quotations for the brewing industry
presented in the Aldrich Report are seventy per cent,
too high. As Professor Bullock remarks, "this
typical brewer who receives over $6,cxx) per year. . .
. . . was certainly worth that amount for statistical
purposes."^ Finally, an investigation made by the
United States Bureau of Labor into the wages of
twenty-five occupations in a few of the leading cities
of the country, showed an increase for this decade of
eight per cent.^ After due allowance has been made
for the various defects in the three sources of infor-
mation considered in this paragraph, the conclusion
seems valid that a real rise in general wages took
place between 1880 and 1890, but that it did not
amount to twelve, nor, in all probability, to eight per
cent. The Aldrich Report states that prices fell nine
per cent, during the same period.

According to the table given above, the number of
male adults receiving less than $12.50 per week in
thirty-four manufacturing industries was sixty-six
per cent, in 1890 and sixty-four per cent, in 1900, —
a gain of two per cent, for the decade in the pro-
portion of those getting a Living Wage. An inves-
tigation made by the United States Bureau of Labor
of forty-two manufacturing and mechanical in-
dustries shows that weekly wages increased eleven
per cent, and the cost of food nine per cent, between
1890 and 1904. ^ The net gain to labor between

* Quarterly Publications of the American Statistical Asso-
ciation, March, 1899.

=■ Bulletin No. 18, p. 668.
'Bulletin No. 59, p. 18.

164

UNDERPAID LABORERS

1890 and any year in the present century seems,
therefore, to have been inconsiderable.

The incomplete and in some respects unreliable
statistics at hand indicate, therefore, that the im-
mense improvements in production that have been
brought about within the last quarter of a century,
have not been followed by a corresponding improve-
ment in the condition of the laborer. His wages have
risen, indeed, during this period, but neither so stead-
ily nor to such an extent as might with reason have
been expected. These statements refer to general
wages. Since the greatest advances in remuneration
have occurred among the organized — who are also
the better paid — workmen, there is some reason to
think that the wages of the poorest paid have not
kept pace with the general increase. ^

Now those features in the evolution of the pro-
cesses of production which seem to have restricted
the upward trend of wages in the recent past, will
in all probability show the same tendency for a long
time to come. The first of them is the prevalence
of monopoly. In his Minority Report as member
of the Industrial Commission, Mr. Phillips estimates
the value of the industries of the country that are
more or less monopolistic in character at $17,000,-
000,000, "or probably one-fifth of what the present
census will find to be the estimated true value of all
property in this country." ^ As a matter of fact,
the great combinations formed in recent years have
paid at least as high wages as their independent

^ Cf. the table of the relative wages prevailing in various
occupations found in the Aldrich Report, p. iii, sq.
* Final Report, p. 684.

I6S

A LIVING WAGE

rivals. * This, however, is but one phase, and very
probably a temporary one, of the situation. Be-
cause of their more economical organization, the so-
called trusts can turn out a given amount of product
with a much smaller labor force than is required in
a regime of competition. Unless they make their
output larger than it would have been under the old
system, they will consequently be able to reduce the
number of their employees. They cannot profit-
ably increase the output without reducing prices to
the consumer, and this, as experience shows, they
will not do. Their usual practice runs in the oppo-
site direction. The result is that men are thrown
out of employment, to enter into competition with
their fellows both within and without the combina-
tions, and thus bring down the wages of all. On
the other hand, the increased cost of living which
follows a monopolistic organization of industry
affects the laborer precisely as it affects other con-
sumers.

The second disquieting fact among the present
tendencies of the productive process is the displace-
ment of men by machines, ^ Professor Smart gives

* Cf. Final Report of the Industrial Commission, p. 625 ;
and Clark's "Problem of Monopoly," p. 69.

^ Referring to the last decade of the Nineteenth century,
the Twelfth Census tells us : "A factor that has had a real
tendency to lower the actual average earnings of the wage-
earner in many of the industries is the displacement of the
skilled operative by machinery, which permits the substitution
of a comparatively unskilled machine hand. This tendency is
noticeable in many lines of industry. Its effects are twofold ;
to reduce the number of employees producing the same or an
increased quantity of product ; and to reduce the average rate
of wages because of the lower degree of skill required."
"Manufactures," Pt. I, p. 123.

166

UNDERPAID LABORERS

it as his opinion that we are only at the beginning of
the machine age, and that the need for man is for the
moment becoming less and less in all fields where
machinery is entering.^ If the need for man grows
less, will not the proportion of unemployed grow
greater? One obvious answer to this question is a
reference to the experience of the past. Up to the
present the substitution of machinery for hand proc-
esses does not seem to have caused any permanent
increase in the proportion of unemployment. The
number of idle men is probably no greater, relatively
to the whole working population, than it was before
the coming of the machine regime. And yet, it must
be borne in mind that this result is a mere accident,
for there is no necessary connection between the in-
troduction or extension of machine production and
the continuity of employment. - On the contrary
there is reason to fear that a more or less direct ratio
exists between the increase in the rate of machine
substitution, and the increase in the rate of unem-
ployment. Assuming that the former will be quite
marked for some time to come, we must, it would
seem, expect the percentage of the unwillingly idle
to increase likewise. Every time a new labor-sav-
ing machine is introduced some men are thrown out
of work; consequently, the greater the amount of
such machinery that is put into operation in a given
year, the greater is the number of men that are un-
employed during some part of that year. Ultimate-
ly they may ail be absorbed in the old industry or in

*Cf. "Distribution of Income," p. 235, note.
'Cf. Hobson, "Evolution of Modern Capitalism," ch. VIII.
167

A LIVING WAGE

related occupations, but there is at least an increase
in the number of those who are temporarily unem-
ployed ; and the more rapidly their number is aug-
mented, the larger will be the sum total of unemploy-
ment, for the process of readjustment will not keep
pace with the acceleration of machine substitution.
Thus, if the new forms of machinery brought into
use in a community this year supplant one thousand
men, whereas those introduced last year displaced
only five hundred, it is more than probable that the
amount of unemployment will be greater this year
than last. Each of the one thousand men will be
out of work for more than half the number of days
during which each of the five hundred was idle.
Any increase in the rate at which men are displaced
by machines, therefore, increases unemployment,
and thus tends to lower wages.

In addition to the rapid introduction of new forms
of capital, the unnecessary multiplication of existing
forms seems liable to impede the upward movement
of wages by augmenting unemployment. We save
too much and consume too little. Too much of the
annual product of the nation is converted into ma-
chinery. *'In a given state of the arts and with
given habits of consumption, a certain amount of
machinery can be advantageously utilized ; a larger
amount than this is waste. We have for generations
been cultivating notions which should make individ-
uals reduce their consumption and increase their in-
vestment until we could obtain the required amount ;
and we have apparently overdone the matter." *

^ Hadley, "Economics," sec. i6i.
l68

UNDERPAID LABORERS

The influence of over-accumulation of capital upon
employment is so well described by Mr. Hobson
that his words are worth quoting at some length :

"In order to test the case, take a community with
stable population where there has existed a right
economic relation between forms of capital and rate
of consumption. Suppose an attempt is initiated to
increase savings by abstention from consumption of

some class of goods, say cotton Since no trade

requires increase of capital, the new savings may
as well be invested in the form of new cotton mills
as in any other way. Let us suppose that the over-
saving of the first year is capitalized in this form.
What has occurred during this first year is that an
increased employment of capital and labor in mak-
ing cotton mills has balanced a diminished employ-
ment in making cotton goods. Assuming an abso-
lute fluidity of capital and labor, the net employment
for the community is not affected by the change. Peo-
ple have simply been paid to make cotton mills in-
stead of to make cotton goods. At the end of the year
there exists an excess of cotton mills over what
would have been required if consumption of cotton
goods had stood firm, a double excess over what is
needed to supply the now reduced demand for cotton
goods. If it seems unfair to any one that I should
apply the over-saving to the only trade where the
demand is absolutely reduced, I can only reply that
it simplifies the argument and makes no real differ-
ence in its validity. If we assume the saving to be
equally distributed among all trades, then at the end
of the year all trades would be to a minor degree in
169

A LIVING WAGE

the same condition as the cotton trade is according
to my illustration.

"If savers were mad enough to continue this
policy, preferring the growing ownership of useless
cotton mills to the satisfaction of consuming com-
modities, the process might continue indefinitely,
without reducing or afifecting in any way the aggre-
gate employment of labor and capital. It would
simply mean that a number of persons take their
satisfaction in seeing new cotton mills rising and
going to decay.

"But it is conceivable that in the second year of
over-saving, the savers instead of continuing to pay
people to put up more mills might employ people to
operate the excess of cotton mills, lending their
money to buy raw material and to pay wages. Cot-
ton goods which ex hypothesi can find no markets
are thus accumulated. If the savers choose to take
their pleasure in such a way, they might go on in-
definitely without the aggregate of employment of
capital or labor being affected. If they continue
this impolicy for a twelvemonth, we should say that
whereas in the first year they saved useless mills, in
the second they saved useless cotton goods. In
neither the first nor the second year is there any net
increase or decrease of employment due to the new
policy of saving. In fact, assuming sanity of in-
dividual conduct, affairs would work out differently.
Admitting an attempt to work the surplus mills, the
actual over-production of goods could not proceed
far. Let us assume savers to use, throughout, the
agency of banks, which are to find investment for

170

UNDERPAID LABORERS

their savings. Suppose the banks, not realizing the
mode of this new saving, have invested the first
year's savings in superfluous cotton mills. These
cotton mills or others in the next year cannot con-
tinue to work without advances from banks, since
they are unable to effect profitable sales. Soon
after the beginning of the second year the banks re-
fuse to make further efforts for over-production:
markets being congested and prices falling, the de-
mand for bank accommodation will grow, but banks
will not be justified in making advances. Now the
weaker mills must stop work, general short time
follows, and the result is unemployment of labor
and forms of capital. This is the first attempt to
over-save upon employment. We have now for the
first time a reduction of the aggregate of production.
The result of reduced employment (under-produc-
tion) will be a reduction of real incomes. This
will tend to proceed until the reduced reward of
saving (real interest) gradually restores the right
proportion of saving to spending — a very slow and
wasteful cure.

"It thus appears that so long as saving can be
vested in new forms of capital, whether these are
socially useful or not, no net reduction of employ-
ment is caused, the portion of income which is saved
employs as much labor as, though not more than,
that which is spent, but when the machinery of pro-
duction is so glutted that attempted saving takes
shape in the massing of loanable capital unable to find
investment, the net production and the net employ-
ment of labor in the community is smaller than it

171

'A LIVING WAGE

would have been had saving been confined to the
minimum required by the needs of the society.

"From the standpoint of employment the injury
done by over-saving is thus seen to consist not in the
over-production of plant or goods but in the condi-
tion of under-production which follows the financial
recognition of this glut. The real waste of power
of capital and labor is measured by the period and
the intensity of the under-production in which forms
of capital and labor stand idle." ^

Over-production induced by over-saving is, of
course, most widespread, as it is most striking, dur-
ing an industrial crisis. But it may exist to a more
limited extent during periods that are regarded as
substantially normal. There may be an excess of
productive instruments in the greater number, or
even in all, of the industries of a country at all times
except those of extraordinary prosperity. Some-
thing very like this seems to have become true of the
United States. Between 1886 and 1896 the average
product of more than two thousand manufacturing
establishments in Massachusetts was only fifty to
seventy per cent, of their full capacity.^ It has been
estimated that with their existing equipment of cap-
ital and labor, the shoe factories of the country could
meet the current annual consumption by running

* "The Problem of the Unemployed," pp. 94-97. See also,
"The Evolution of Modern Capitalism," ch. VII, by the same
author. Professor Smart observes that this theory has not
met with the attention that it deserves. Anyone who will
carefully examine it cannot fail to be impressed with its super-
ior value as an explanation of the phenomena that constitute
an industrial depression.

* Eleventh Report of the Annual Statistics of Manufactures,
pp. 99-104, 169.

172

UNDERPAID LABORERS

steadily for four months. ^ In the absence of larger
statistics, no precise estimate of the extent of the
phenomenon can be attempted, but if everyday ob-
servation may be relied upon the amount of produc-
tive power that is unused is enormous. At every
turn we seem to see efficient machinery abandoned or
running on short time. And the cause is almost
never a scarcity of labor. Now if the idle or par-
tially idle capital-instruments were the worst of their
kind, and if the new machinery invariably and im-
mediately crowded out all the poorer instruments
that were not needed to supply the current rate of
consumption, the excessive accumulation of capital
would cause neither over-production nor diminution
of employment. The savings that might have been
exchanged for consumption goods would have been
expended in making machines that were allowed
to perish as fast as newe^ machines adequate to the
current demand were put in operation. Thus labor
would be kept employed and excessive production
restricted. But the industrial mechanism does not
work so smoothly. The owners of the older instru-
ments of production are not doing business on this
lofty plane of philanthropy. They continue to pro-
duce, and to compete for a share in a market that is
beginning to be over-supplied. The directors of
production see prices, and therefore profits, declining,
and endeavor to recoup by lowering wages. Profits,
however, continue to diminish until some of the in-
dustries are closed, others are running only a part

* Final Report of Industrial Commission, p. 752.
173

A LIVING WAGE

of the time, unemployment has increased, and wages
are further reduced.

This theory is at variance, obviously, with one of
the common-places of the older political economy.
We have been assured very frequently that general
over-production is an absurdity, since a supply of
goods always means a demand for goods, and since
the wants of men are never fully satisfied. Undoubt-
edly the existence of goods implies the power to pur-
chase other goods, and the existence of unsatisfied
wants means a desire to purchase ; but what Adam
Smith called "effective demand," the only kind of
demand that will take the surplus goods off the
market, requires that the purchasing power and the
desire exist in the same persons. As things are,
those who can consume more have not the desire,
and those who have the desire have not the power.
And there is assuredly nothing in the nature of our
industrial mechanism to prevent this condition, which
is obviously possible in one or two lines of produc-
tion, from being realized in all. This failure of pro-
duction and consumption to function harmoniously
in the economic organism seems to have escaped the
notice of so able a writer as Professor Clark, when
he wrote: "The richer the world is in capital, the
richer the worker is in productive power." ^ Richer
in productive pozvcr, yes ; but what if the condition
of consumption, the actual demand for products
does not call for the full exercise of this power ? The
very excess of productive power relatively to the
needs that are combined with purchasing power,

*"The Distribution of Wealth," p. 172, note.
174

UNDERPAID LABORERS

means an excess of supply of labor, which in turn
means unemployment and low wages.

The three forces of combination, rapid introduc-
tion of new forms of machinery, and excessive mul-
tiplication of existing forms, seem likely to continue
operative for a long time to come. In a general
way they are mutually helpful in their detrimental
effects on labor. The powerful and highly organ-
ized industrial combinations are able to put in new
forms of machinery on a more extended scale than
would be possible in a regime of small industries.
It is true that these combinations will check ovei -
supply of capital in the fields in which they are
supreme, but in so doing they limit the opportunities
of new capital. Outside of the province dominated
by the great industries, therefore, the danger of a
too abundant supply of capital instruments is in-
creased ; it has gained in intension what it has lost in
extension.

To sum up, sufficient data have been presented to
justify the conclusion that the proportion of adult
male wage earners (outside of agriculture, where
the remuneration is much lower but the cost of living
not so high) obtaining less than $600 per year,
is at least sixty per cent. A partial confirmation
of this estimate is seen in Mr. Robert Hunter's cal-
culation that, "not less than 10,000,000 persons in the
United States are in poverty" ; that is, "they may be
able to get a bare sustenance, but they are not able
to obtain those necessities which will permit them
to maintain a state of physical efficiency." ^ Ex-

"Poverty," pp. 60 and 5.

17s

A LIVING WAGE

plaining "physical efficiency," he says : "No one will
fail to realize how low such a standard is. It does
not necessarily include any of the intellectual,
aesthetic, or social necessities ; it is a purely physical
standard, dividing those who are in poverty from
those who may be said to be out of it." ^ Allowing
one male adult to every five persons, we see that
Mr. Hunter's estimate is equivalent to the statement
that two million men in the United States do not get
a wage sufficient to supply their normal physical
wants. They are on a physical level below that of a
well kept horse or cow. This condition alone makes
il altogether probable that sixty per cent, of the adult
male wage earners among the 13,113,590 males
above sixteen years engaged in gainful occupations
other than agricultural and professional, receive less
than $600 annually. As to the prospects of the
underpaid, wages have increased less rapidly dur-
ing the last quarter of a century — the period of
our greatest industrial improvements — than during
the previous thirty years. Whence the inference
seems valid, that side by side with the progress of
production there have existed forces which have
prevented the laborer from obtaining his full share
of the results of that progress. Three of these forc-
es, namely, monopolistic combinations, rapid dis-
placement of labor by machinery, and excessive
multiplication of the instruments of production, will
in all probability be with us for many years yet, in-
creasing the rate of unemployment and restricting
the upward movement of wages. From these evils

^ Idem, p. 7.

176

UNDERPAID LABORERS

the poorest paid, being the least able either to resist
a reduction or to utilize the possibilities of a rise in
their remuneration, will naturally be the greatest
sufferers.

u 177

CHAPTER IX

Our Industrial Resources and a Living Wage
For All

The national income may be regarded as a sum of prod-
ucts or as the total of personal incomes. In the first sense
it cannot be satisfactorily estimated. From an estimate
in the second sense no definite conclusion can be drawn
concerning the amount of income per family that would
result from an equal distribution. The consequences of a
better utilization of the nation's industrial resources: (a)
an immense increase in the national product on account
of the increased productivity of those who are now under-
paid: (b) a very considerable increase from the abolition
of luxury; (c) a sufficient increase to make possible a
decent livelihood for all from the employment of idle
labor and capital.

The fact that so large a proportion of the laborers
of America fail to get a Living Wage naturally
raises the question, whether this condition is not in
some measure due to the insufficiency of our resourc
es of production? If the facts call for an affirmative
answer it cannot be maintained that all the laborers
of America have a present, actual right to a Living
Wage. There are no rights to conditions or actions
that are impossible of realization. Let us first
examine whether the present national income would
afford a universal Living- Wage if it were equally
178

OUR INDUSTRIAL RESOURCES

distributed, and then whether our productive capaci-
ties, actual and possible, are adequate to this end.

The national income, that is, the aggregate of util-
ities put at the disposal of the inhabitants of the
nation in the course of the year, may be conceived
of and described in two ways : either as the total
amount of goods and services made available, or as
the sum of all the incomes received by the owners
of the instruments of production, the makers of
the products, and the performers of personal ser-
vices. In the first sense, the national income
comprises the sum total of food, clothing, hous-
ing, fuel, lighting, and material goods generally,
and all immaterial services, such as, the advice
given by the lawyer, the instruction furnished
by the teacher and the clergyman, the entertainment
afforded by the actor, the tasks performed by the
domestic servant, etc., — that are annually produced
and made available for the satisfaction of human
wants. Now if we could estimate this total of goods
and services in some comprehensive way and express
it by some common term, we should be in a position
to answer the first of the questions proposed above.
As this condition is obviously impossible, owing to
lack of statistical data and the inherent difficulties of
the problem, we turn to the second measure of the
national income. We ask, how much money have
the capitalists, landowners, laborers, entrepreneurs,
professional men, domestic servants, and the rest, re-
ceived during the year for the part that they have tak-
en in producing or rendering available all these goods
and services ? Instead of measuring the latter direct-

179

A LIVING WAGE

ly, we get an indirect measure in the money that has
been paid for producing them. Nor is the sum of
individual incomes an excessive measure of the na-
tional product. It is, indeed, greater than the value
of the material product, inasmuch as the sums re-
ceived for making the latter are frequently duplicated
and sometimes tripled in the income calculation.
A part of the net profit obtained by the manufac-
turer, for example, is paid out to domestic servants,
and thus figures twice in the summary of personal
incomes. It must be kept in mind, however, that the
national product, national income, the annual sum
of utilities put at the nation's disposal, consists not
merely of material goods, but of material goods plus
immaterial personal services. The services rendered
by the physician, the barber, the coachman, or the
cook, are as truly utilities, are as much a part of the
good things that are annually made available for the
use and comfort of the people, as are wheat, iron or
cotton. They must consequently find a place in any
calculation of the nation's total income or product.

What is the present national income of terms of
personal incomes? Anything like a definite answer
is impossible, but Dr. Spahr's estimate will furnish
a basis for a rough guess, and, moreover, will serve
to show the unimportance of the question as far as
concerns the purpose of this chapter. According
to his computation, the total amount obtained by all
classes of income-receivers in 1890 was $10,800,000,-
000.^ This divided equally among the 12,500,000
families then in the country (reckoning five persons

^"Present Distribution of Wealth in the United States,"
pp. 104, 105.

180

OUR INDUSTRIAL RESOURCES

to a family) would have provided each with an
annual income of $864, — a very liberal Living
Wage. Unfortunately, however, the problem is not
one of simple division ; for the national income does
not exist as a lump sum, and is not distributed all at
once. It is divided among the producers according
as it is produced, and this method of distribution
determines the direction of the productive forces
and the amount of the product. ^ An equal division
of the national income among all the income receiv-
ers in 1890 would necessarily have been made with-
in a few days, or at most a few weeks, of the time
when the goods and services were produced. As a
consequence, the demand for products would have
been other than it actually was during that year.
Since workers of every description would have been
in receipt of comfortable but not large incomes, the
demand for luxuries would have been considerably
less, and the demand for necessaries and comforts
immensely greater. Hence the amount and kind of
products brought into existence in response to this
different demand would have been other than they
really were, and there is a probability equivalent to
a certainty that the sum total of incomes received by
the contributors to these products would have been
either more or less than $io,8oo,cxx),ooo. The in-
come per family would, therefore, have been repre-
sented by some other figure than $864. Moreover,
this sum would in all probability not have had the

* Cf. Seager's review of Smart's "Distribution of Income"
in the "Annals of the American Academy of Political and
Social Science," vol. xvi, p. 140.

181

A LIVING WAGE

same purchasing power that it had in the system of
distribution that actually existed in 1890.

The difficulties called up by this partial statement
of the problem render any attempt to estimate the in-
come that men would receive from an absolutely
equal distribution, a waste of time. Let us, there-
fore, abandon this line of inquiry, and ask ourselves
whether the natural resources and productive forces
of the country would, if fully utilized, provide all
laborers and their families with the requisites of a
decent livelihood. What, in the first place would
be the probable effect of a Living Wage on the pro-
ductive efficiency of those workers who are at pres-
ent receiving less than that rate?

According to the theory of "the economy of high
wages," — at least, when stated in its extreme form — •
every increase in the laborer's remuneration will be
followed by a relatively larger increase in his pro-
duct. The higher his wage, the more profitable will
he be to his employer. If these assumptions were
valid the possibility of a universal Living Wage
would be abundantly proved, and the only practical
task remaining would be to convince employers that
the theory was sound.

The evidence of Sir Thomas Brassey, founded
mainly upon his own and his father's experience as
railway builders in every quarter of the globe, tended
to show that highly-paid labor is the cheapest in
occupations requiring great muscular exertion. ^
Schulze-Gaevernitz, - Schoenhof ^ and Brentano *

^ "Work and Wages."
" "Der Grossbetrieb."
' "The Economy of High Wages."
•"Hours, Wages, and Production."
182

OUR INDUSTRIAL RESOURCES

maintain that the same principle holds g-ood in ma-
chine industries. ^ The widest and most searching
of the investigations upon which these authors base
their conclusions was that made by Schulze-Gaever-
nitz in the field of cotton manufacture. He found
that in America, where wages are highest, the cost
of producing a yard of cotton goods was lower than
in any other country. On the other hand, Mr. Hob-
son is of the opinion that, "while a rise of wages is
nearly always attended by a rise of efficiency of labor
and of the product, the proportion which the in-
creased efficiency will bear to the rise of wage will
differ in every employment." ^

The theory is of interest here only in so far as it
applies to those laborers who are at present under-
paid. If the receipt of a Living Wage by them
would result in a corresponding increase in their
productivity, the latter would, of course, be suffi-
cient to provide the increased remuneration. Presi-
dent Hadley seems to hold that no such universal
augmenting of productive power would occur.
Low-grade labor, he says, is the cheapest in some
employments, but not in work requiring a great
amount of physical strength. ^ If this view is cor-
rect a large proportion of the underpaid, namely^
those engaged in exhausting muscular activity,
would prove more profitable to their employers if
they were paid a Living Wage ; but the workers in
industries that involve not so much a large output

^Cf. Walker, "The Wages Question," ch. III.

'"The Evolution of Capitalism," p. 271. Chapter X of this
work gives a concise presentation and a critical analysis of the
theory under consideration.

* "Economics," sees. 361-363.
183

A LIVING WAGE

of physical energy, as the long-continued and mo-
notonous exercise of a few muscles, for example,
garment workers and machine tenders, would fail
to "make" the increased compensation. Professol
Marshall says that all consumption by the laborer
within the limits of the necessaries for efficiency is
"strictly productive consumption; any stinting of
this consumption is not economical, but wasteful."*
And his estimate of the necessaries for efficiency
"comprises, as we saw in the last chapter but one,
a decent livelihood for the laborer and his family.
In view of the complicated nature of the problem,
however, the only general conclusion that seems
justifiable is that the payment of a Living Wage to
the underpaid would be followed by an immense
increase in the national product. ^

A second means of helping to make possible a
Living Wage for all might be sought in the aboli-
tion of expenditures for luxuries. According to
Professor Marshall, "more than one-half of the con-
sumption of the upper classes of society in England
is wholly unnecessary." ^ The same is probably
true of the wealthier classes in America. If the
labor and capital now employed in producing the
superfluities of life were utilized in adding to the
stock of necessaries and comforts, the supply of the

* "Principles of Economics," p. 123, ist ed,

' Sidney and Beatrice Webb are firmly convinced that a
universal Living Wage would be an economic and social gain
to Great Britain, and they seem to have made a most careful
and searching analysis of the whole matter. See the chapter
on, "The Economic Characteristics of Trade Unionism,"
especially, pp. 715-739, in the first edition of "Industrial
Democracy."

• Op. cit., p. 124.

184

OUR INDUSTRIAL RESOURCES

latter would be vastly increased. Professor
Smart's illustration of the enormous amount of the
nation's resources that may be diverted to the pro-
duction of luxuries which will satisfy only a few per-
sons, is so clear and striking that it is worth quoting
in full:

"Indeed, a small minority of the world's inhab-
itants may take up all the increase in wealth, leav-
ing the majority at the old level, or sinking them
below that level. Plant a field with potatoes, and
leave enough grass to pasture a cow, and the field
will maintain a dozen farmers in sound, healthy life.
But sow the field down in the finer vegetables, and
plant gooseberry bushes on the pasture, and the
field will now yield vegetables for perhaps half a
dozen. Finally, suppose the field to be sown down
in flowers, not only does it not support anybody,
but it cannot support enough of flowers to satisfy a
few rich people. By this it may be seen that a cer-
tain amount of labor and capital may be devoted to
maintaining an entire nation in plain but sound
life. Or it may be so employed as to yield a high
level of comfort to a good many, while keeping a
majority at the twenty-shilling-a-week level. Or
it may be laid out to supply the intellectual, spirit-
ual, and aesthetic wants of a few, while the major-
ity are on the twenty-shilling level, and a minority
is at the starvation level. It is not true that the
well being of society as a whole is secured by the
accumulation of wealth and capital. The great
majority may be very little the richer for it." ^

* "Studies in Economics," pp. 323, 324.
185

A LIVING WAGE

The effect of transferring productive energies
from the field of luxuries to that of necessaries and
comforts, is touched upon only to show what might
1)6 expected from that quarter in the event that re-
course to it were necessary. In the present state
of our industrial resources no such necessity exists.
The material requisites of a decent livelihood for all
could be provided without curtailing in the slightest
the present production of superfluities. The prob-
lem of the underpaid is not a problem of produc-
tion at all, but of distribution. Indeed, so long as
the existing extremes of distribution, personal in-
comes, and individual purchasing powers obtain,
it is better, from the purely economic viewpoint,
that the present outlay for luxuries should be con-
tinued, yes, increased, than that it should be con-
verted into capital, and intensify the evils of over-
production and unemployment. This phase of the
problem seems to escape entirely the notice of those
superficial writers who condemn luxury chiefly on
the ground that it is a waste of wealth that might
have gone to swell the fund of productive capital.
It is true that lavish expenditures for articles whose
cost of production is out of all proportion to their
real utility, and which minister only to vanity or
still lower perversions of passion, constitute a grave
moral and social evil ; but as long as consumption
lags so far behind production, they are the lesser of
two economic evils.

The third and chief source from which the in-
crease in the wages of the underpaid can be drawn,
is the vast amount of productive power that is at

i86

OUR INDUSTRIAL RESOURCES

present unutilized or only partially utilized. The
question of the increased productivity of the under-
paid themselves has already been discussed ; refer-
ence here is to the unemployed workers and espec-
ially to the material factors of production. No one
M^ho is at all acquainted with the unused industrial
resources of America, — the lands, mines, and fish-
eries, the machinery that exists and that could read-
ily be called into existence, the numbers of men that
are nearly always unemployed in nearly every in-
dustry,— can doubt for a moment that if all these
were fully utilized in addition to the productive
forces actually employed, the national product would
be abundantly adequate to provide a decent liveli-
hood for every man, woman, and child in the coun-
try. The tendency of production to outrun con-
sumption, which was spoken of in the last chapter,
is in itself almost a sufficient proof of the proposition
for which we are contending. One of the most
striking indications of the tendency is to be found
in the recent political phenomenon of "Imperialism."
America has been drawn into a tremendous rivalry
with the other great world powers for the possession
of "spheres of influence" in the less developed
regions of the earth. Only on the surface and in
some of the means employed, is this contest politic-
al ; fundamentally and in its final aim, it is economic,
commercial. The activities of international politics
are to a large and increasing extent busy with the
problem of finding a foreign outlet for products and
capital that cannot be consumed and employed at
home. *

*Cf. Reinsch, "World Politics," p. 31, sq. The following
187

A LIVING WAGE

The possibilities that are bound up with an in-
crease in the productivity of the underpaid, the
aboHtion of luxury, and the full utilization of idle
productive power of all kinds, prove as conclusively
as any reasonable mind could ask, that the problem
of the underpaid is wholly one of distribution.
What Professor Smart says of England may be
applied with emphasis to the United States: "The
abolition of poverty is now within our reach if we,
as a society, are really bent on its abolition. The
resources of the nation in capital, invention, and
labor are now so great that the one want of the
time is organization, so that there shall be no mis-
direction of production, no waste in consumption.

sentences taken from John A. Hobson's "Imperialism," ch. VI,
suggest what seems to be the only adequate explanation of
the attitude of America toward the imperialistic movement.
They were written in 1901. "The spirit of adventure, the
American 'mission of civilization,' are, as forces making for
Imperialism, clearly subordinate to the driving force of the
economic factor. The dramatic character of the change is
due to the unprecedented rapidity of the industrial revolution
in the United States during the last two decades. During that
period the United States, with her unrivalled natural resources,
her immense resources of skilled and unskilled labor, and her
genius for invention and organization, has developed the best
equipped and most productive manufacturing economy the

world has yet seen The power of production has far

outstripped the actual rate of consumption It is suffi-
cient to point out that the manufacturing power of a country
like the United States may grow so fast as to exceed the de-
mands of the home market. No one acquainted with trade will
deny a fact which all American economists assert, that this is
the condition which the United States has reached within the
last few years, so far as the more developed industries aie

concerned It is this sudden demand for foreign markets

for manufactures and for investments which is avowedly re-
sponsible for the adoption of Imperialism as a political policy
and practice by the Republican party to which the great indus-
trial and financial chiefs belong, and which belongs to them."

188

OUR INDUSTRIAL RESOURCES

no friction from the currency." ^ So far as produc-
tive resources are concerned, modern life is not, as
Malthus supposes, a lottery in which "some unhappy
persons have drawn a blank." ^ There remains,
then, the problem of distribution. The discussion
of that phase of the problem which has to do with
the obligations of the different economic classes to
provide the laborer with a Living Wage, will be the
burden of the remaining chapters of this volume.

1 "Studies in Economics," p. 330.

2 "Population," vol. ii, p. 34, London, 1826.

X89

CHAPTER X

The Forces That Regulate Price

The obligation of providing the laborer with a Living
Wage is conditioned by the forces controlling the present
distributive system. All the factors of production are paid
for out of the price of the product. The latter is deter-
mined immediately by the quantative relations between
supply and demand, remotely by natural resources, ex-
penses of production, the desires of the buyers, and the
purchasing power of the buyers. Incorrectness of the
Socialist theory of value.

The obligation correlative to the right to a Living
Wage falls upon "the members of the industrial
community in which the laborer lives." After the
laborer himself, they are the immediate and the
principal beneficiaries of his exertion ; and they are
chiefly responsible for his success or failure in real-
izing his fundamental right of access on reasonable
terms to as much of the common heritage of mate-
rial things as will enable him to live a decent life.
Only to a secondary extent are the members of oth-
er industrial communities gainers by his toil or de-
termining factors in the matter of his industrial
opportunities. Besides, they are burdened with re-
sponsibilities of their own toward the laborers with
whom they are in immediate relations. What, then,
190

FORCES THAT REGULATE PRICE

is the concrete meaning of the phrase, "the members
of the industrial community in which the laborer
lives"? A negative answer may be given at once:
it does not chiefly refer to the community as a politic-
al entity. The duty of paying all laborers a Living
Wage does not rest primarily on the State, or on
any provincial or municipal subdivision of it. The
present economic system is not an institution or a
department of the State ; it is shaped, controlled and
maintained by individuals. Upon individuals or
classes of individuals, therefore, rests immediately
and chiefly the responsibility of directing the system
along the lines of justice. In order to know the
class or classes of individuals that are charged with
the obligation in question, and the degree in which
it is shared by each class, we shall find it profitable,
necessary in fact, to make a brief review of the
present distributive process.

The national product is divided among the factors
of production in the following manner: One share
goes to the laborers, or wage earners, in the form
of wages ; another, to the organizer, director, under-
taker, of a business, in other words, the employer of
the laborers, and is known as profits ; a third portion
is taken by the owner of capital as interest ; a fourth
share is paid to the landowner under the name of
economic rent. Other classifications of the factors
of production and their rewards are preferred by
some writers, but the one here given is the most
common, and seems to be the most convenient. Two
or more of these productive functions may be dis-
charged by the same person, as, in the case of the
191

A LIVING WAGE

manufacturer who directs the operation of a factory
with his own capital on his own land. Such a per-
son is at once employer, capitalist, and landlord,
and receives the three appropriate shares of the
product. Even here the several shares can be
reckoned separately.

Now the product of an industry, or of all the in-
dustries of the nation, is not distributed among the
various productive contributors in its material forn).
The men who furnish the labor, and directive abil-
ity, and capital, and land for running a shoe factory
are not paid for their services in shoes. What they
receive is a certain proportion of the price for which
the shoes are sold. The same is true of all other
industries, extractive, agricultural, manufacturing,
transport, or trade. Hence the total price, or value
— for price is only the concrete money form of social
value — of the product determines the total amount
that will be distributed among the owners of the
various factors of production.

The total price obtained for the product of any
industry during a period of time depends upon the
selling price of the separate units of product. In
other words, it is determined by the market price.
And the market price depends upon the conditions
of supply and demand. No doubt, it would be more
scientific to say that the market price is fixed by
the "subjective valuation of the two Marginal
Pairs," or, by "the valuation of the Least Capable
Buyer." Since, however, we have the assurance of
Boehm-Bawerk himself that, "the law of price may
be correctly, though less expressively and less un-

192

FORCES THAT REGULATE PRICE

ambiguously, formulated in terms of supply and
demand," our present aim will be better realized
through the medium of the older and simpler phrase-
ology. There is no objection, says the author just
mentioned, "to treating the theory of price under the
good old catchwords. Supply and Demand, if care
is only taken to avoid the errors and misunderstand-
ings which so plentifully surround them, and to in-
form the old forms and formulae with new and
clear knowledge." ^ To guard against error and
misunderstanding, therefore, let us define supply as.
the amount of a commodity that is or will be offered
for sale at a given price; and demand, as the amount
that buyers are able and willing to take at a given
price.

Market price, therefore, is always determined by
the quantative relation existing between supply and
demand, that is, by the relation which the amount
offered at a price bears to the amount that buyers
are willing to take at that price. In any market
the quantity of goods to be had will vary directly
with the price demanded ; sellers will be ready to
proffer more at a high price than at a low price. On
the other hand, the amount that will be demanded
will vary inversely with the price offered; buyers

* "Positive Theory of Capital," pp. 214, 215. For a tech-
nical and scientific treatment of the subject of value, see :
Smart's "Introduction to the Theory of Value" ; Wieser's
"Natural Value" ; Boehm-Bawerk's "Positive Theory of Cap-
ital," Books III and IV ; Macfarlane's "Value and Distribu-
tion," Part I ; Carver's "Distribution of Wealth," ch. I ; and
Hobson's "Economics of Distribution," ch. Ill, which contains
a brief but effective criticism of the excessive emphasis put
upon the element of utility by the writers of the "Austrian
School."

13 193

A LIVING WAGE

will take more at a low price than at a high price.
Out of the differences that exist between the quan-
tities offered at various prices on the one side, and
the quantities asked for at those prices on the other,
the actual market price emerges as a sort of result-
ant. When the amount offered at a given price is
great relatively to the amount asked for at that
price, the resulting market price will be lower than
when the amount offered at any price is small rela-
tively to the amount desired at the same price. The
market price will always be at that point at which
the quantity offered is equal to the amount desired;
or, where supply and demand are equal.

While the statement just made is necessarily in-
definite and not entirely satisfactory, it is not a
mere identical proposition. It tells us by implication
that different amounts are offered or are available
at different prices, that different amounts are de-
sired at different prices, and that the market price
cannot be any of these except one at which the
amounts offered and demanded are equal. And it
is quite as exprtssive as the more technical formula
that market price will be at or about the valuation
of that one among the actual buyers whose valua-
tion is lowest. It suggests, moreover, a sufficient
notion of the causes that bring about changes in
price. These are either immediate or remote. The
immediate cause of a change in price is a change in
the quantative relation between supply and demand.
When supply decreases relatively to demand or when
demand increases relatively to supply, prices will
rise; when supply increases relatively to demand or
194

FORCES THAT REGULATE PRICE

when demand decreases relatively to supply, prices
will fall. Thus a change in price may be effected
by forces acting either from the side of supply or
from the side of demand. Supply remaining the
same, a change in demand will produce a change in
price ; demand continuing constant, price will change
through a change in supply.

It has been contended that, since price change is
a process rather than a static fact, supply and de-
mand should not be considered as stationary
amounts but as flows. The movement of goods in
a market is best represented as a continuous inflow
and outflow, and the operations of supply and de-
mand as varying rate of such movement. "Where
goods flow out of a stock at the same pace as they
flow in, the price remains firm and demand and sup-
ply will be said to be equilibrated ; where the inflow
is faster than the outflow, prices fall and supply will
be said to exceed demand; where the outflow is
faster prices rise, and demand exceeds supply. ^

The remote causes of a change in price are: on
the side of supply, a change in the condition of nat-
ural resources or in the expenses of production;
on the side of demand, a change in the desires or
in the purchasing power of the buyers. In the mat-
ter of coal, for example, the exhaustion of certain
fields, or a rise in wages or profits, will cause a rise
in price, while changes in the opposite direction will
bring about a fall. This statement assumes, of
course, that there has been no proportionate increase
in demand. On the other hand, with no correspond-

* Hobson, "The Economics of Distribution," p. 60.
195

A LIVING WAGE

ing increase in supply, an increased desire for coal
in those whose purchasing power is ample, or an
increase in the purchasing power of those whose
desire has heretofore exceeded their purchasing
power, will produce a rise, just as changes that
point the other way will produce a fall in price. Two
or more of these forces may operate simultaneously,
either assisting or counteracting one another. ^

From this brief review of the forces that deter-
mine price, we can readily perceive the unsoundness
of the theory of value defended by the founders of
socialism. According to Karl Marx, the value of
goods is determined and created solely by labor, is,
in fact, merely the quantity of labor they embody. ^
More precisely, the value of any commodity is de-
termined by the average labor time required to pro-
duce it in a given condition of industry. If one
coat has as great a value as two pairs of shoes, the
explanation is to be found in the fact that the
average coat maker — not any particular individual
— needs twice the time to turn out one coat that
the average shoe maker takes to produce one pair
of shoes. Value, therefore, is something inherent
in goods, put there solely by the laborer.

Now labor is neither the sole determinant of value
nor sufficient of itself to produce value. One of
the most obvious facts of the market is that com-
modities change in value while the labor contained in
them remains unchanged. The amount of labor
expended on the millinery "creations" that were in

* Cf . Hobson, op. cit., 81-84.

• See "Capital," Part I, ch. I.

196

FORCES THAT REGULATE PRICE

vogue last year is in them still, but they no longer
have the same value or sell at the old price. Again,
new and fertile land has value, although it has not
cost labor. Marx attempts to meet cases of this
kind by saying that such commodities have a price
but no value, but, since he admits that price is only
"the money form of value," he escapes the difficulty
at the cost of self-contradiction. At any rate, if
value in the Socialist theory be not equivalent to
price it has no bearing on the present discussion ;
for the problem of distribution is primarily con-
cerned with the price of things, their market price.
On the other hand, labor cannot of itself produce
value. Men may expend indefinite quantities of
labor on commodities, yet if the latter are not wanted
by someone they will have no value and bring no
price. No amount of labor embodied in wooden
shoes will give them value to a community that will
not wear wooden shoes. To objections of this na-
ture Marx replies that in order to produce value
the labor exerted must be socially useful, that is,
they must have a certain utility for consumers ; but
this is a virtual admission that labor is not the sole
determinant of value. ^

The simple and obvious truth of the matter is that
the value, or price, of goods is determined, caused,
regulated, by the quantative relations between supply
and demand, and that the determinant forces act
from both sides. On the side of supply one of
the determinants is labor, but it is not the only one,

'A good analysis of Marx' theory of value and the contra-
dictions into which he falls will be found in John Rae's ''Con-
temporary Socialism," 2d ed., pp. 160-166.

197

A LIVING WAGE

and even if it were it would not be all-important;
for the forces implied in demand exercise an addi-
tional and distinct influence.

The total amount of money, therefore, that is
available for division among the owners of the fac-
tors of production — landlords, undertakers, capital-
ists, and laborers — in any industry or in all indus-
tries, is the total price that is received for the prod-
uct. This in turn is determined immediately by
the quantative relations existing between the supply
of and the demand for the product, and remotely
by the condition of natural resources and the ex-
penses of production, on the one hand, and, on the
other hand, by the desires and purchasing power of
the buyers. Supply and demand are likewise the
immediate determinants of the price that is paid
for the use of any factor of production. In order
to ascertain the possibilities of increasing the present
price of underpaid labor, and the extent to which the
employer and other industrial functionaries are able
and obliged to convert these possibilities into reality,
we shall make a brief examination of the remote
forces that govern the rewards of each factor. A
chapter will be devoted to each of the subjects of
rent, profits, interest, and wages.

ig8

CHAPTER XI

Rent

The surplus produced by the better soils and locations
is called rent. Examples of both kinds. The greater the
difference between a better field and the poorest field in
use, the higher will be the rent of the former. Rents will
not increase with every actual extension of cultivation.
Price determines rent, not vice versa. The rent of city
locations is governed by the same laws as that of agricul-
tural lands. Meaning of commercial rent. All economic
rent tends to go to the owner of the land.

In any agricultural region land varies both in
fertility and in convenience to the market. As a
consequence, equal expenditures of labor and capital
on different fields do not produce equal net returns.
The better grades of soil will yield larger crops than
the poorer soils, and the fields nearer to the market
will, owing to the smaller cost of marketing their
product, yield a higher net profit than equally fertile
fields that are not so well situated. Hence differ-
ences in fertility and differences in situation rela-
tively to the market will cause differences in the
amounts received from the cultivation of land.

Let us take an example of differences in fertility.
An expediture of $ioo in capital and labor is
applied to the cultivation of each of three fields

199

A LIVING WAGE

with the result that the first produces 120, the sec-
ond, no, and the third, 100 bushels of wheat. As-
suming that the price of wheat is one dollar per
bushel, and that the cost of marketing is included
in the outlay of $100, it is seen that the product
of the third soil just meets the expenses of produc-
tion, while the second and first soils yield respect-
ively ten and twenty bushels — or ten and twenty dol-
lars— above the amount expended upon them and in
excess of the return obtained from the third field.
To this surplus is given the name of economic rent.
With regard to lands differing in fertility, it may
be defined as the difference between the product of
any better land and the product of the poorest land
that is put to the same use with the same expendi-
ture of labor and capital. It represents, therefore,
superior productivity of soil.

In a precisely similar way, rents will arise in con-
nection with lands that are variously situated with
respect to the market. If three fields yield 120
bushels of wheat each with expenses of cultivation
of $100 each, and if the greater distance of the sec-
ond and third fields from the market necessitates an
additional expenditure of ten and twenty dollars
respectively, it is clear that the first field will pro-
duce a surplus of twenty dollars and the second a
surplus of ten dollars. These amounts are rent, and
represent not superior fertility but superior loca-
tion. Hence a definition that would apply to both
kinds of land differences might be framed in these
terms: Rent is that surplus which is yielded by all
the superior soils or locations above the poorest soil
200

RENT

or location, devoted to a given use with a given ex-
penditure of labor and capital. It may also be de-
fined as, the excess yielded by land beyond the ex-
penses of production, xA.s long as the poorest land
returns nothing more than the expenses of produc-
tion, one definition is equivalent to another; but as
soon as it produces a surplus, the former definition
ceases to express as much as the latter.

Manifestly the greater the difference between the
more fertile or better situated fields and the poorest
fields in use, the higher will be their rent. Using
the first of the two examples above given, and as-
suming an increase in the demand for wheat that
brings the price up to $1.25 per bushel, we see that
$100 worth of capital and labor could now be applied
to the cultivation of a field that would yield only
eighty bushels. At $1.25 per bushel the crop would
cover the expenses of production. But the three
superior fields are still producing respectively 100,
no, and 120 bushels, which, at $1.25 per bushel,
means a surplus of $25, $37.50, and $50. Thus the
third soil now pays a rent for the first time, while
the rent of the second has been increased by $27.50,
and that of the first by $30. As a matter of fact,
the increase in rent will be greater than this if, ow-
ing to the enhanced price of wheat, an additional
amount of capital and labor expended on the better
fields will produce a surplus in excess of the new
outlay. If an additional expenditure of $25 will be
followed by an addition of twenty-two bushels to
the product, the rent of that field is increased by
$2.50. Should the price of wheat rise sufficiently to

201

A LIVING WAGE

make profitable the cultivation of a still poorer field,
the differential advantages of the three better soils
would be further augmented, and the fourth would
yield a rent equal to its superiority over the new
field. Therefore, the poorer the land that may
profitably be cultiyated — the farther is extended the
"margin of cultivation," — the greater will be the
number of soils yielding rent, and the higher will be
the rent from each.

The rent of lands already in use will not, however,
increase with every actual extension of cultivation.
It would not be true to say, the greater the amount
of land in use, the higher the rent of the better
fields. The cultivation of new land will cause a
rise in rent only when the new land is poorer, either
in fertility or situation, than the old. This is not
always the order in which successive increments of
land are taken up. Owing to ignorance, inertia, or
want of opportunity on the part of the cultivators,
some of the better lands are often brought into use
long after those that are less profitable. The effect
of this process is to reduce instead of raising the
rents of the older lands. The extension of cultiva-
tion to lands that are better than some of those al-
ready in use may be sufficient to increase the supply
of produce, say, wheat, faster than the demand for
it, and thus reduce its price. This means a reduc-
tion in profits and in rents.

An example is afforded by the movement of
rents within the last half century in England and in
our own Eastern States. The opening up of im-
mense tracts of land in the West in conjunction with

202

RENT

the improved facilities of transportation, has low-
ered the price of farm products in the older regions,
thus throwing the poorest lands out of cultivation and
lowering rents.

Since rent comes into existence only in conse-
quence of a rise in the price of the product, it is in
general not a determinant of price. The order of
causality is : increase of demand for product ; rise in
price of product ; extension of cultivation to poorer
land ; appearance of rent on better lands. Strictly
speaking, the last two phenomena are co-ordinate
effects of increased price of the product ; for even
in the absence of any poorer land, the fields already
in use would now yield a surplus above the expenses
of production. Though not a difi:erential gain as
between one soil and another, this surplus is a dif-
ferential relatively to costs, is due to land as dis-
tinguished from the other factors, and usually ob-
tains the name of rent. In a sense this absolute
rent, which may arise both when all lands under
cultivation are equally advantageous and when the
poorest land yields a surplus, does determine the
price of the product, inasmuch as the owners of
such lands could, if they chose, transfer it to the
consumers in the form of lower prices. In this sense
price is likewise, within certain limits, determined by
profits, interest and wages. Whatever view may be
taken of the relation between the rent of the poorest
land and price, there can be no question that the
rent of all the better lands is not a cause of price but
an effect. Price is not high because some lands pay
a high rent, but some lands pay a high rent because

203

A LIVING WAGE

price is high. That part of the necessary supply
which is raised on the poorest land — the last portion
of the supply — must bring a price sufficiently high
to cover the expenses of producing it; those por-
tions that come from all the better lands will sell at
the same price. Hence the emergence of rent.
Whether the rent is retained by the owners of the
land, or handed over to the State, or destroyed, the
price will remain the same; for it is determined by
the relation between demand and supply. The in-
crease in demand which precedes the appearance of
rent or its increase, is caused by an increase in the
purchasing power or in the desires of the consumers ;
the failure of the supply to keep pace with the en-
hanced demand is due to the scarcity of the better
soils or locations. From the side of supply, there-
fore, the last mentioned factor is fundamental in
producing the rise in price, the extension of cultiva-
tion to poorer lands, and the appearance and increase
of rent. ^

* The assertion that rent does not determine price, or rather,
that prices are not higher because of the existence of rent,
assumes individual management of agriculture. If the State
were to direct the cultivation and sell the products of all the
lands in a community, with the present outlay for tilling and
marketing, it could obviously reduce the price of the product to
an extent equivalent to the present payments for rent. The
expenses of production on all of the four fields referred to
above were $400; the total product, 410 bushels of wheat; and
the rent on all three of the better fields, $112.50. Under a
system of unified management the whole crop could be sold for
$400 instead of $512.50, or $0.97.5 instead of $1.25 per bushel.
Still, the true cause of this difference in price is not rent but
the private management of production, which requires that the
common price be sufficiently high to cover the cost of produc-
tion of the most expensive portion of the supply, and auto-
matically leaves a surplus to the owners of the better lands.
This point is made, not as an argument for collectivism — in

204

RENT

The same general laws that govern agricultural
rent apply to the rent of city lots and locations. All
the better locations will produce a surplus above the
return from an equal amount of capital and labor
employed on the site whose situation is poorest. The
expense of producing a given amount of goods will
be less on some sites than on others, as in the case
of a mill that has superior water-power facilities,
or a jobbing establishment that is nearer to the rail-
way station. Again, the volume of business done
with a given expenditure of capital and labor will
be different on different locations. If a clothing
merchant in the center of a city can in one year
make twice as many sales as a competitor who em-
ploys the same quantity of capital and labor and
sells at the same price on the outskirts of the city,
he will obtain a surplus gain that will be due solely
to his more profitable situation. Since the surplus
represents the superior earning capacity of the bet-
ter site, it is rent.

Commercial rent, the rent of ordinary business
language, is economic rent plus interest on the capi-
tal invested in improvements. If a merchant pays
$1,200 annually for the use of a building and lot, if
the building is worth $10,000, and if the prevailing
return from such investments is six per cent, only
one-half of the $1,200 is economic rent. The other
half is interest on the capital invested in the build-
ing.

Under the present system of landholding, all eco-

which the writer most emphatically does not believe. — but as an
attempt at a complete statement of the relations between rent
and price.

205

A LIVING WAGE

nomic rent, even the surplus arising on the poorest
soils or locations in use, will go or tend to go to the
owners of the land. The tendency will invariably-
become a reality when the owner of the land is also
its cultivator or occupier. When the owner hires
the use of the land to someone else he will usually
get practically all the rent, at least in the long run.
The cultivator of the 120-bushel wheat tract that
we have already considered might for a time obtain
the use of it for, say, $10 per year. With wheat
selling at $1 per bushel and the cost of producing
the crop only $100, he would, therefore, secure half
the economic rent. Ordinarily, however, he could
not long retain this advantage, as other cultivators
would offer the owner a higher rent, or the latter
would himself discover the advantage enjoyed by
the present tenant. Sooner or later the owner
would get substantially all the excess over the
usual cost of production. The same law holds
for locations in cities. ^

* For a more extended exposition of the theory of rent any
standard manual of economics will be found satisfactory. A
very thorough discussion of the subject in all its phases is
contained in Walker's "Land and its Rent." Clark takes ex-
ception to the prevailing statement of the relation of rent to
price in his "Distribution of Wealth," ch. XXIII.

206

CHAPTER XII

Profits

Profits constitute the share of the undertaker. They
tend, in the case of the majority of undertakers, to a com-
mon and minimum level. This minimum determines
the price of the product. Exceptionally large profits have
no influence on price. The elimination of some of the ex-
isting undertakers would result in a reduction of prices and
of the total volume of profits. In the case of joint-stock
companies profits do not arise as a distinct share of the
product.

In the strict sense the term profits denotes that
share of the product that is taken by the owner of a
business for his services as the director of its move-
ments and the taker of its risks. Such a person is
variously called the employer, the entrepreneur, the
undertaker, the business man. His function in in-
dustry is to estimate the public demand for goods,
and to organize, direct and pay for the capital and
labor required to meet the demand. Being the re-
sponsible head of the business he controls, he does
not look to someone else for his remuneration. This
he must himself provide out of the gross profits of
the undertaking, that is, out of that part of the
product that remains after wages and salaries, inter-
est on borrowed capital, commercial rent, and the
207

A LIVING WAGE

cost of materials have been deducted. Out of this
gross profit must come interest on his own capital
used in the business, an allowance to replace the
wear and tear of productive instruments, a certain
amount for insurance against unfavorable years, and
finally his personal reward for labor and for such
risks of the business as are not covered by an insur-
ance or reserve fund.

The undertaker's share of the product of industry
is evidently a variable one. Its size will depend up-
on his ability to forecast the demand for his goods,
and his success in putting the latter on the market
at a minimum cost. The more accurately he can
gauge the tastes and purchasing power of the public,
and the lower he can reduce the outlay for capital
and labor, the greater will be his net profits. How-
ever, the rewards of the majority of business men,
at least in undertakings of the same general kind
and size, tend toward a common and minimum level.
Those who possess exceptional ability, or who oc-
cupy a favored position on account of established
reputation, patents, government assistance, or some
kind of monopoly advantage, will, of course, get
more than this minimum. ^

As long as the goods produced by those under-
takers who obtain the minimum amount of profits

^ The theory even in a modified form of an equal rate of
profits is criticized as inaccurate by Devas ; "Political Econ-
omy," pp. 437-442, 2d ed. But after all due allowance is made
for the presence of monopoly profits, the statement in the text
still seems to be substantially correct. For a fuller treatment
of profits the reader is referred to Marshall's "Principles of
Economics," Hadley's "Economics," and Carver's "Distribution
of Wealth."

208

PROFITS

are a necessary portion of the supply, the price of
the entire supply will be determined by this mini-
mum. If the lowest paid class of business men can-
not put a certain kind of goods on the market at a
lower cost for capital and labor than ninety cents
per unit of product, and if they will not accept less
than ten cents as profit, the selling price of the goods
must be one dollar. Any lower price would drive
these men out of business and stop a necessary
part of the supply. With supply thus curtailed,
prices would again rise to the point required to at-
tract their services. Hence the normal or minimum
rate of profits is an essential part of the cost of
production, and enters into the determination of the
price of the product.

Undertakers having exceptional ability or ex-
ceptional opportunity will sell their goods at the
common price, and therefore obtain exceptional
profits. This surplus, sometimes called pure profit,
is a differential gain, just as the rent of land is a
differential gain. It is due to advantages, not of
fertility or location, but of ability and opportunity.
Like the rent of land, it does not influence price ;
for it comes into existence as a consequence of the
price that is required to cover the higher cost of
production entailed by the other undertakers.

From the fact that the price of goods must be
sufficiently high to yield the minimum amount of
profits to all those undertakers who furnish a neces-
sary portion of the supply, it does not follow that
none of the undertakers who at present contribute
regularly to the product and obtain the normal rate

14 209

A LIVING WAGE

of profit could go out of the business without caus-
ing a rise in price. Since all the existing under-
takers are not turning out the full product of which
they are capable, some of them, especially in the
retail trades, could be dispensed with, while those
who remained would be able to keep up and even
increase the current supply. That the survivors
would increase the total supply is practically certain,
owing to the larger volume of individual profits
that would be assured from a larger individual out-
put. The final results would be a fall in price and
a decrease in the size of the total share of industry
obtained by undertakers in the form of profits. ^

Profits in the strict sense of a necessary return
to one of the agents of production, arise only in con-
nection with the private business or firm, as dis-
tinguished from the joint-stock company or corpora-
tion. In the latter the function of active direction
is discharged by the officers and the board of direct-
ors who receive fixed salaries, while the risks are
assumed by the whole body of stockholders, and are
provided for either by a reserve fund or in the form
of a sufficiently high rate of dividend. Hence the
product of these businesses is regularly divided into
only three shares, namely, wages and salaries, inter-
est, and rent.

* Cf. Veblen, "The Theory of Business Enterprise," ch. III.

210

CHAPTER XIII

Interest

Interest is the price paid to the capitalist for the use of
the material instruments of production. It comes out of
the product that these instruments help to create. But it is
reckoned on the basis of capital-value. All capital tends
to yield the same rate of interest. The rate is determined
immediately by the relation of supply to demand, remotely
by two factors on the side of supply and three on the side
of demand. It is measured by the productivity of the least
productive material capital that continues to be used and
to attract investments. The relation between interest and
wages : (a) when there is no change in the organization or
in the methods of production; (b) when such changes take
place.

Interest is the share of the product of industry re-
ceived by the capitahst. By the capitaHst is meant
the man whose money is invested in the material in-
struments of production: he may own the instru-
ments himself, or he may have loaned his money to
someone else who assumes the function of investor
and owner. Fundamentally, therefore, interest is
a return for, a price paid for, the use of material
capital. For when a man borrows money and
agrees to pay interest on it, his final motive is al-
ways the utility that he expects to derive from the
things that the borrowed money will enable him to

211

A LIVING WAGE

obtain. These things may be either consumers'
goods, such as food and clothing, or producers'
goods, such as factories and railroads. In either
case, the ultimate reason why he pays interest is to
be sought not in the money that he has borrowed,
but in the concrete utilities for which the money is
exchanged. With the interest that is paid on loans
for purposes of consumption we have no concern;
we deal with interest only in so far as it is one of the
shares of the product of industry. Hence the defi-
nition of it as, the share received by the capitalist,
or, the return for the use of the material instruments
of production.

The source of this interest is to be found in the
product which is created through the agency of ma-
terial capital. A plow manufacturer, for example,
agrees to pay interest on money that he has bor-
rowed and exchanged for machinery, because he
knows that the plows which will thereby be produced
will sell for a price that will enable him to pay in-
terest in addition to all the other costs of produc-
tion. The product that is turned out with the aid
of machinery is so much larger than the product
that would have come into being without it, that it
covers wages, profits, rent, depreciation and inter-
est. ^ If the owner of the business has invested some
of his own money in its equipment he will likewise

* A moderate statement of the productivity-theory of inter-
est, and an effective criticism of Boehm-Bawerk's theory, will
be found in Hobson's "Economics of Distribution," ch. IX. The
statements contained in the text above are, however, consistent
with either theory; for no explanation is attempted of the fact
that the product will have a value sufficiently large to cover
interest.

212

INTEREST

levy interest on the product, according to the amount
of his investment. In this case he will retain the
interest payment himself.

Although interest is ultimately paid for the use of
the material instruments of production and out of
the product that is created through their agency, it
is reckoned and measured in terms of percentage
and value. The man who has equipped his busi-
ness with borrowed capital does not pay a certain
rent adjusted according to the number and kind of
certain instruments, such as machinery, wagons,
buildings, etc. On the money that he has borrowed,
considered as a sum of value, say, $100,000, he an-
nually pays a fraction of this amount, say, five per
cent. He will measure in the same way the interest
that he gets or desires to get on any money of his
own that he has invested. To put the matter
technically, the rate of interest is estimated not on
capital-instruments, but on capital-value.

Since interest is measured in this way, and since
there is always new capital seeking investment, all
portions of capital within a region in which active
economic inter-communication exists are in competi-
tion, and the tendency is toward one rate of interest.
Those borrowers who conduct exceptionally prof-
itable businesses can obtain money as cheaply as
those whose enterprises yield smaller returns.
Those who happen to be paying an unusually high
rate will cease to do so as soon as the time of the
existing loan expires. They will either compel their
present creditors to reloan the money at the pre-
vailing rate, or replace it with money borrowed from
213

A LIVING WAGE

son^eone else. Tluj ability of new capital-value to
displace that already invested prevents the latter
from returning an exceptional rate of interest to the
man who has loaned it, just as the presence of a
second merchant in a market makes it impossible
for the first to charge an arbitrary price for his
wares. Even in the case of capital-instruments
that have been purchased with the money of their
owner, and that are yielding abnormally high re-
turns, as, for example, the machinery in a very rich
mine, — there is a sense in which the rate of interest
is only normal. For the owner will capitalize the
extra returns, and value his capital, not according
to the amount of dollars invested, but in proportion
to its actual earning power. If the interest return
is equivalent to ten per cent, on his investment and
if the prevailing rate is five per cent., he will reckon
the business as worth twice the amount he put into
it. And this will be its market or selling price. On
this basis, therefore, the actual revenue will provide
only the ordinary rate of interest.

How is it, then, that capital brings different rates
even in the same local market? Strictly speaking,
those percentages by which the normal or prevailing
rate is exceeded are not of the nature of true inter-
est. They are either a compensation for the unusual
risk involved in the loan, an extortion levied upon
the ignorance or dire need of the borrower, or a
monopoly tribute exacted on account of a tempo-
rary stringency in the money market. When it is
asserted that there is a common rate of interest, what
is meant is that capital loaned in average conditions
214

INTEREST

of security, knowledge, and bargaining power, yields
approximately one rate of interest.

The rate of interest, the price paid for the use of
capital, is, like the price of any other economic good,
proximately regulated by the quantative relations
between supply and demand. Supply is made up of
the different amounts of money that men are will-
ing to lend at different rates ; demand of the various
quantities that men will take at various rates. The
actual rate is a resultant of this two-sided competi-
tion, and must always be at that point at which sup-
ply and demand are in equilibrium. A change in the
rate can occur only in consequence of a previous
change in the quantative relation of these immediate
determinants. When the supply of capital increases
faster than the concurrent demand, the rate of inter-
est will fall, and vice versa. The remote, or ulti-
mate, forces regulating the rate are chiefly : on the
side of supply, the industrial resources of the com-
munity, and the relative strength of its habits of
spending and saving; on the side of demand, the
productivity or perfection of existing capital-instru-
ments, the comparative intensity of men's desires to
lend their money for a small but secure gain and to
invest it themselves for a larger but less certain re-
turn, and the relative supply of land, business ability,
and labor. A community that is rich in productive
resources, natural or artificial, will evidently be
able to create more capital than one that is poorer in
these conditions, while a thrifty or parsimonious
people will have more than a shiftless or extravagant
one. On the other hand, when the existing forms

2IS

A LIVING WAGE

of material capital turn out a large product in pro-
portion to their cost, when the amount of capital
owned by persons who prefer large risks and large
gains to small risks and small gains is great, or when
the supply of land, business ability, and labor is
abundant relatively to the supply of capital, the de-
mand for the latter will be greater than when the
opposite conditions prevail. These assertions con-
cerning the influence of the remote factors on the
rate of interest assume, of course, that in each in-
stance all the other conditions remain unchanged.
The rate of interest may properly be compared
with and stated in terms of each of the five remote
factors, provided that the causal influence of the
other four be not denied but merely assumed to con-
tinue stable in the midst of the variations of the
factor under discussion. In any such presentation
of the matter the single factor is regarded, not as
wholly determining, but as accurately measuring the
level and movement of the rate. Of these compar-
isons the most suggestive and fruitful relate to the
productivity of capital-instruments and the supply
of labor. Different businesses yield different rates
of profit per unit of capital-value contained in them,
but the poorest of them must, if they are to continue
to attract investments, produce a return eqtiivalent
to the prevailing rate of interest on loans. Material
capital that fails to yield this minimum may, indeed,
continue to be used, especially when it has been
bought with money owned by the owner of the busi-
ness, but it will not become the receptacle of new
capital-value. In other words, concrete capital of
216

INTEREST

this kind will not, generally speaking, be replaced
or increased, and consequently will have no definite
relation to the current rate of interest. But the
productivity of, the percentage of profit returned
by the least productive instruments into which capi-
tal continues to flow, will fix, or measure, the re-
muneration of all capital. Those portions of capital
that are loaned to the users of instruments which
have a higher productivity, will not command a high-
er rate, any more than a pair of shoes sold to a rich
man will fetch more than the market price. This
class of borrowers can afford to pay more for
loans than those who are putting money into the
poorer instruments, but they need not and will not
do so, as long as capital is freely and continuously
offered and obtained at a lower rate in the same
market.

In order to estimate the effect of labor supply on
the rate of interest, let us first take a situation in
which labor and capital continue for sometime to be
combined in the same forms, in the same manner,
and in the same proportions. Labor is displaced
neither by new types of machinery nor by improve-
ments in the old types. All the conditions of the
productive process are so stable that a given quan-
tity of a given kind of goods is produced by precisely
the same amounts of labor and capital that were re-
quired five years ago. In these circumstances
equal increases of labor and capital will not disturb
the relation between their rates of remuneration.
Wages will bear the same relation to interest after
as before the change. Neither will gain relatively

217

A LIVING WAGE

to the other ; for each addition to the supply of labor
is balanced by an equal proportion of increase in the
supply of capital, and, since there has been no change
in the methods of production, the demand for both
is affected in the same degree. It is not maintained
that the owners would get the same proportion of the
total product as formerly, for the shares of the
undertaker or landowner might be augmented at the
expense of the capitalist and the laborer; nor that
the rates of wages and interest would remain the
same numerically, — that, for example, the former
rates of two dollars per day for labor and six per
cent, per annum for capital would still be main-
tained,— for they might suffer a change on account
of a rise or fall in the price of products. A change
of the latter kind would, however, affect wages and
interest in equal proportions.

When capital and labor do not increase in the
same degree, the existing ratio between the rates of
interest and of wages will be disturbed. If capital
increases faster than labor, interest will fall relatively
to wages, and vice versa. A decline in the rate of
interest from six to five per cent, will not be ac-
companied by a fall of wages from $2.00 to $1.66^.
In fact, wages might rise above two dollars. What-
ever the new wage-rate might be absolutely, it would
be relatively higher than the new rate of interest.
The laborer would have gained in comparison with
the capitalist. Obviously these statements are
merely a particular application of the law of supply
and demand. When the price of wheat falls in
consequence of an increase in supply, the decline is
218

INTEREST

relative to the price of other goods. The vital fact
is that the supply of other goods has not increased
as rapidly as the supply of wheat. In like manner
when the supply of capital increases at a more rapid
rate than the labor supply, its price will fall relatively
to the price of labor. Demand for labor is now
larger than the demand for capital ; the extra amount
of capital will, so to speak, run after labor ; competi-
tion is less active among owners of labor than among
owners of capital. ^

The analysis contained in the two preceding para-
graphs assumes, as already stated, that no change
takes place in the organization of industry or in the
methods of production. The assumption evidently
does not correspond with actual conditions. Under
our regime of large-scale production, the organiza-
tion of the productive factors suffers continuous
modification. The new forms in which labor and
capital are combined effect a saving in the amount
of each that is required to make a given amount of
product. When a number of independent estab-
lishments are consolidated a considerable portion of
the former labor force is rendered unnecessary,
while the poorer factories can be closed and the
better ones operated at their full capacity. Assum-
ing that the total price received for the product re-
mains what it was before, the result will be an in-

^ Cf. Sidgwick, "Principles of Political Economy," vol. i, p.
347 ; Clark, "The Distribution of Wealth," chs. XI and XII ;
and Hobson, "The Economics of Distribution," ch. VI. The
student of the general subject of interest may consult, in addi-
tion to the volumes just mentioned, Boehm-Bawerk's "Capital
and Interest," and "Positive Theory of Capital," and the
works of Marshall, Hadley, and Carver cited in the last
chapter.

219

A LIVING WAGE

crease in the supply of labor and capital relatively
to the demand for them, and a decrease in their re-
muneration. Reference is to the whole amount of
labor and capital in an economic community, and to
what will happen in the long run. These unfavor-
able changes in earnings will bear less harshly on
that factor in which there has been less saving. If
the proportion of capital that has been dispensed
with is greater than that of labor — say, one-sixth in
the former case and one-seventh in the latter — the
advantage will be on the side of labor, and interest
will fall relatively to wages.

Such changes in the methods of production as the
introduction of new forms of machinery and of im-
provements in existing forms, will supplant labor
by capital, and increase disproportionately the sup-
ply of labor. As a matter of fact, capital is increas-
ing much faster than labor, but the gain to the latter
is not correspondingly large. ^ Some of the new
capital is not merely competing with other capital
for an opportunity to engage labor, but becomes a
competitor with labor in operations that have hither-
to been monopolized by the latter. In these opera-
tions capital is no longer labor's auxiliary ; it is now
labor's rival. For example, capital that under the
old conditions would have gone into type and type-
setters' cases is now embodied in typesetting ma-
chines which take the place of men. The process
of substitution, of which this is only one instance,

^Between 1890 and 1900 the increase of capital in the
manufacturing industries of the country was 51 per cent., that
of labor only 25 per cent. ; but there was no corresponding fall
of interest relatively to wages. Cf. "Final Report of the In-
dustrial Commission," pp. 491-2.
220

INTEREST

means an increase in the demand for capital relative-
ly to the demand for labor, and consequently a
tendency toward a high rate of interest relatively to
the rate of wages. If the laborers that have been
supplanted by the new machinery cannot readily
find employment in other occupations, this tendency
will become a reality. The increased amount of
unemployment among laborers will offset to a great-
er or less degree the advantage that comes to labor
from a disproportionately rapid increase in the sup-
ply of capital. While, therefore, capital is actually
increasing faster than labor, a part of it is displacing
labor, and the relative movements of interest and
wages are determined on the one hand by the ex-
tent of the displacement and on the other by the de-
mand for the displaced labor in other departments
of industry.

'J2l

CHAPTER XIV

Wages

Wages are a return for utilities created by labor. Since
laborers are divided into non-competing groups, there is no
common rate of wages. The three chief limitations of com-
petition among the different groups. Wages in any group
are determined immediately by supply and demand, re-
motely by a number of distinct forces. They approximate
the productivity of the least productive members of the
group, that is, the value of the product of these members.
The relation between wages and interest. The determin-
ants of general wages.

Wages denote the remuneration of the man who
sells his labor to an employer at a certain rate per
unit of time or per unit of product. The last clause
points to the division of laborers into time workers
and piece workers. The energy exerted by the
laborer brings into being utilities, which are either
immaterial, as the personal services rendered by the
valet and the coachman, or material, as in the
case of the weaver and the bricklayer. What is
ultimately paid for in every instance is the utility
that is created, rather than the energy that is ex-
pended ; just as interest is paid for the utility that is
derived from the use of the borrowed money, and not
for the mere transfer of the money in the form of a

222

WAGES

loan. In the great majority of labor contracts the
utility that the laborer creates or helps to create is
re-sold by his employer; and the remuneration that
he receives is simply his. share of the joint product
to which he has contributed in conjunction with the
other factors of production. His wage comes out
of his product. Sometimes, however, the employer,
instead of re-selling the utility created by his em-
ployee, consumes it himself. In this case wages are
derived from the employer's personal income, not
from the product of the labor given in exchange for
them. Examples will readily occur in many forms
of domestic and professional service. Even this
class is remunerated ultimately out of the total prod-
uct of the nation's industry ; hence the truth of the
general statement that wages are labor's portion of
the national product.

While the assertion that all capital tends to yield
but one rate of interest is substantially correct, a
similar affirmation concerning wages would be mis-
leading, or rather, untrue. Competition among
laborers is not nearly so immediate nor so extensive
as among the owners of capital. Locomotive en-
gineers have no fear of being displaced by "section-
hands." The world of labor is divided into a series
of "non-competing" groups which rise one above
another, from the lowest grade of common labor to
the highest form of special ability and skill. Within
each group there is competition, more or less im-
mediate and unlimited ; but among the various
groups it is indirect in action and restricted in ex-
tent. The latter kind of competition is maintained
223

A LIVING WAGE

not so much by present members of the groups as
by those about to become members. Aside from the
difficulty of moving from a lower to a higher
group, there is always a certain influence exerted
by inertia and custom which tends to compel work-
ers to continue at their present tasks. From this
influence persons who have not yet entered any par-
ticular occupation are, of course, free. Now groups
that are relatively under-supplied, in which wages
are consequently high, will naturally attract a great-
er proportion of new members than groups that are
overcrowded. And if all the persons who are regular-
ly called upon to select an occupation were in a po-
sition to exercise a perfectly free choice, the different
groups would be in unlimited competition with one
another in all but two respects, namely, relative
attractiveness and relative cost of preparation to
enter them. Thus occupations of equal attractive-
ness would be supplied in inverse ratio to the cost of
becoming fitted for them, while occupations stand-
ing on the same level in the latter respect would be
filled in accordance with their attractiveness. Since
the more pleasant occupations are very frequently
the ones entailing large costs of preparation, the two
kinds of inequality would, to a considerable degree,
balance each other. Labor would not flow into dis-
agreeable occupations more rapidly than into the
opposite kind unless the training cost of the latter
were regarded as a greater evil than the unattract-
iveness of the former. In the long run, therefore,
competition among the different groups of laborers
would be limited only by the net advantages or dis-
224

WAGES

advantages of cost of preparation as against dis-
agreeableness of work. As a matter of fact, how-
ever, the majority of those about to take up a life
work cannot choose from the entire field, for they
have not the financial resources required to make
such a wide choice effective. Despite increased
educational and other opportunities, the greater?
number of the young in the lower walks of life are
under the practical necessity of entering one of the
lower groups of workers. Competition between the
lower and higher groups is, therefore, less thorough
than it would be if a larger proportion of the pro-
spective workers were financially able to fit them-
selves for the latter ; and the apportionment of new
arrivals among the various groups is not made sole-
ly on the basis of a balance between disagreeableness
of work and cost of preparation. Taking the groups
as a whole, we may say that competition among them
is limited by unequal attractiveness, unequal training
cost, and unequal opportunity of selection.^

It is to be noted that groups are distinguished
from one another, not so much by differences of in-
dustry or of kinds of work, as by differences of
working power and skill. The group known as
"common laborers" has representatives in almost
every industry. Digging sewers is not the same
kind of work as shoveling coal, yet diggers and

^ The classic description of non-competing groups is that
given by J. S. Cairnes in "Some Leading Principles of Political
Economy," pp. 65-73. In addition to the three forces men-
tioned above, which are peculiar to the world of labor, the gen-
eral limitations of competition are, of course, operative with
regard to the different groups of laborers. These are chiefly
ignorance, inertia, immobility, benevolence, and monopoly,

IS 225

A LIVING WAGE

shovelers belong to the same group because each
can do the work performed by the other. The
group, therefore, is composed on the basis of similar-
ity in the working efficiency of its members, — its
members are interchangeable.

The level, and movement, and laws of wages may
be studied both in the single group and with refer-
ence to the whole of the laboring class. Let us con-
sider first the single group. Here, as in the case of
all other commodities that are bought and sold
under conditions of competition, the price is imme-
diately regulated by the forces of supply and de-
mand. The wages of any group of laborers will
always be at that point at which the quantity of
labor oflfered is equal to the quantity asked for.
Conversely, at any existing rate of wages, supply and
demand will be in equilibrium. The equilibrium
will be disturbed, a change will take place in the
rate of wages only in consequence of a change in
the quantative relations of demand and supply.
When the quantity of labor that is wanted at the
current rate of wages increases faster than the sup-
ply that is offered at this rate, the change will be
upward; when the supply outruns demand there
will be a variation in the opposite direction and wa-
ges will fall.

The remote forces, the ultimate causes, that de-
termine the movement of supply and demand and
the rate of wages, are many and complex. From
the side of supply they are chiefly: the mobility of
labor, that is, its power to move into or out of a
group ; custom, the tendency of which in some occu-
226

WAGES

patlons is to continue long established rates of re-
muneration in spite of changes in the labor supply;
the standard of living of the laborers, which checks
competition and counteracts the decline in wages
that otherwise would follow an increase in supply ;
the cost of subsistence and reproduction in the case
of the members of the lowest paid groups; labor
organizations, whose effect on supply is similar to
that produced by established standards of living;
the birth rate and the rate of immigration with
reference to the potential supply of any group ; final-
ly, the productivity of labor, that is, the size of the
product turned out by the group with its actual
equipment of implements and machinery. The
principal demand-factors are: competition for labor
among employers ; activity of production, or the gen-
eral conditions of industrial prosperity; activity of
consumption and the rate of saving, which are merely
important elements in the last mentioned factor;
and the supply of land, business ability, and capital
relatively to labor supply. All of these factors are
to some extent original causes of the rate of wages,
and each of them is assisted and counteracted by
one or more of the others. The actual wages of any
group are a resultant of their inter-action.

In the last chapter, the rate of interest was
described in terms of the productivity of capital:
the rate of wages may be advantageously compared
with the productivity of labor, more precisely, with
its marginal productivity. Let us assume that all
the members of a group are equally productive, that
they all contribute equal amounts to the making of

227

A LIVING WAGE

their combined product. The disappearance of one
from the group — the positions of the others remain-
ing unchanged — would lessen the total pioduct in
exactly the same degree as the disappearance of an-
other. Since all are equally capable and perform
equally important tasks, they will turn out products
of equal value, and, assuming competition to be per-
fect, will receive equal amounts of wages. Now it
is evident that the sum of the wages paid to the
group cannot exceed the value of the total product ;
for the product is their source.^ If the margin be-
tween the total wages of the group and the total
value of its product is unusually wide, and if all the
members of the group are fully employed the em-
ployers will strive to increase their product by en-
ticing laborers from one another. As a result of
this competition for labor, wages will rise until the
employers have only enough left to pay rent and m-
terest, and obtain for themselves the minimum profit.
In case all the members of the group are not fully
employed, the employers will increase the total labor
force and product, thus depressing the price of the
latter and raising the remuneration of the former,

^ The product is obviously not the source from which is
drawn the remuneration of those groups whose product (per-
sonal services) is consumed instead of being sold by the
employer. Of this nature are some of the professional classes,
for example, lawyers and physicians. There is, however,
scarcely a single group of laborers — using the word group to
comprise all who are interchangeable in working efficiency, and
the word laborer in the ordinary sense — that is wholly of this
kind. Practically all of them are composed partly, the major-
ity of them dominantly, a large proportion wholly, of persons
whose product is sold by their employer, in other words, of
industrial workers. Hence it may be safely said that the
wages of these groups are regulated by the product of the in-
dustrial members of the group.

228

WAGES

until the unusual margin of profit disappears. Thus
the total wages paid to the members of a group al-
ways equals the selling price of the product, minus
rent, interest, and normal profits ; and since all le-
ceive the same remuneration and turn out the same
amount of product, the wage of each may be said
to be fixed by his productivity.

Usually, however, all the members of a group do
not produce equal quantities. While they are all
equally capable, and in similar conditions would be
equally productive, they are not all in a position fully
to utilize their capabilities. Laborers under the di-
rection of an incompetent employer, and those work-
ing with poor tools or machinery, cannot turn out as
large a product as their fellows of the same group
who are more advantageously situated. Yet the
amount of product that is dependent upon any man's
presence, the amount that would not be in existence
if he were removed, his "associated product," must
have a value at least equal to the wage that he re-
ceives. The laborer whose product does not provide
his wage is not a profitable investment, and cannot,
on business grounds, be retained. This principle
applies to even the least productive members of a
group.

On the other hand, the wages received by any
member of a group will not fall far below the value
of the product of its least productive members ; for
an employer will continue to add laborers to his force
as long as the product resulting from their presence
is sufficient to provide their remuneration. All the
employers will pursue this course until the money

229

A LIVING WAGE

return from the product that is associated with the
activity of the least productive or least important
laborers will approximate their wages. These are
the "marginal" members of the group ; their produc-
tive power is the group's "marginal" productivity;
and the product dependent on their presence is the
"marginal" product of the group, because they stand
at the margin of profitable employment. Now the
wages obtained by these men will fix the remunera-
tion of all the other members of the group ; for they
are all equally capable. What one man can do every
other man can do. In the actual organization of
industry some are, indeed, less productive than oth-
ers, but this is because they are for the time being
engaged in less important tasks, or are not so well
provided with auxiliary capital. Any one of them
could, if called upon, take the place of any one of the
more productive workers. Consequently an em-
ployer will pay the latter no more than the former.
Thus the mobility of laborers of the same group has
the same effect on their wages as the mobility of new
capital on the rate of interest. Capital that is loaned
for investment in highly productive instruments can
command no higher interest than capital that goes
into the least productive enterprises because other
capital stands ready to take its place. Laborers
engaged in highly productive tasks will get no higher
wages than their equally capable fellows in the least
productive employments because they can be readily
displaced by the latter.

Evidently this analysis assumes a perfection of
competition that does not exist. On account of ig-
230

WAGES

norance, immobility, or failure to assert themselves,
some members of the group are paid much less than
the value of the group's marginal product. On the
other hand, one employer will often pay higher
wages than another, either through habit or for
reasons of humanity or expediency, or because his
employees are strongly organized, or owing to
ignorance of the wages prevailing elsewhere in the
same group. The assumption that every employer's
business is of such a nature that he can increase the
number of his laborers one by one and stop at the
precise point where an additional man would be
unprofitable, is likewise far from being universally
valid. In a given establishment the least productive
men may turn out a product that is worth consider-
ably more than their wages, but the circumstances
of the business may be such that no addition short
of five men will be practicable. Now the product
brought into being by the five may be less in value
than the amount of wages that they must receive.
In that case new men will not be employed, and the
remuneration of the least productive laborers actu-
ally at work will not approximate the selling price
of their product.

Nevertheless this presentation of the matter cor-
rectly describes the tendency of wages. The re-
muneration of all the members of a group of equally
capable workers will tend to equal that of its least
productive members, and the wages of the latter will
tend to approximate the value of their product.

The value, not the amount of the product, it must
be noted, regulates wages. With the same expendi-

231

A LIVING WAGE

tore of skill and energ>-. but aided by better tools of
inachmen% the laborers of a group may turn out
double the amount of their former product: yet if
the price of the product has fallen in the meantime
thcr will certainly not receive twice as much wages
as when their product was only half its present size.
And the value of the product is itself determined by
the condition of supply and demand, which is in turn
governed, as we have seen in a former chapter, by
more remote forces. WTiile, therefore, the value of
the product is a convenient measure of wages, it
is not an ultimate determining factor.

As seen in the last chapter, the relation between
wages and interest is dependent on the relation be-
tween the supply of labor and the supply of capital.
Methods of production remaining the same, the
wages of a group will rise relatively to interest when
the capital supply of the group increases faster than
the labor supply. WTien productive conditions
change in such a way that labor is displaced by capi-
tal, the more rapid increase of the latter will be
partially or wholly neutralized, so that the gain of
wages relatively to the rate of interest will be
diminished or entirely prevented.

So much for the determinants and measures of
the wages of any group. Concerning wages in gen-
eral, the sum total of remimeration obtained by all
the groups within a period of time, it may be said
that they are governed immediately by supply and
demand, ultimately by the several remote forces
that regulate group wages. To say that general
wages are measured by the marginal productivity" of
23^

WAGES

the least productive group of workers, would be
obviously unmeaning, misleading and, indeed, un-
true; but the assertion that the ratio between them
and the rate of interest depends on the relation be-
tween increase of labor and increase of capital con-
veys an important truth. Perhaps the most fruitful
single proposition that can be laid down is this: in
any given conditions of production and consump-
tion, wages, labor's share of the national product,
will be determined by the ease or difficulty of in-
creasing the supply of labor relatively to the supply
of land, business ability, and capital.^

* Cf. Hobson, "Ihe Economics of Distribution," pp. 201-217.
The subject of wages is ably treated in the works of Nicholson,
Clark, Sidgwick, Marshall, Hadley, and Carver which have
been cited in the chapters immediately preceding. See ?lso
Walker, "The Wages' Question" ; Levasseur, "The American
Workman" ; Gunton, "Wealth and Progress" ; and Smart, "The
Distribution of Income."

933

SECTION IV

THE OBLIGATIONS

CORRESPONDING

TO THE RIGHT

CHAPTER XV

The Obligation of the Employer

Restatement of some fundamental conclusions. The
obligation of providing the laborer with a Living Wage
falls upon the employer because of his economic position.
Neither labor contracts nor the productivity of labor ars
necessarily correct measures of justice. The employer who
cannot pay a Living Wage is not bound to do so, but the
laborer's right to a decent livelihood is superior to the em-
ployer's right to enjoy goods that are superfluous to his
social position. The employer is obliged to pay a Living
Wage before he obtains interest on his invested capital.
The productivity of capital and the sacrifice of saving are
to some extent valid titles of interest, but they are inferior
to the title of needs. A corporation is under obligation
to pay a Living Wage at the expense of dividends.

Three of the more important conckisions arrived
at in preceding chapters may with advantage be re-
stated. First, the laborer's right to a Living Wage
is merely the concrete expression of the general
right, which inheres in him as in all other men, to
obtain on reasonable terms as much of the common
bounty of nature as will enable him to live decently.
Those who reject this general right are logically
compelled to reject the intrinsic worth and sacred-
ness of personality, to deny the reality of moral
rights, and to maintain that the only determinants

237

A LIVING WAGE

of property titles are the potency of physical force
and the ordinances of the civil law. Those who
admit the validity of the general right will logically
conclude that in the laborer it becomes the right to
a Living Wage because, in the present economic
and political order, there is no other reasonable way
by which it can obtain a concrete existence. Sec-
ond, the corresponding obligation falls upon "the
members of the industrial community in which the
laborer lives," since they are the primary benefici-
aries of the laborer's exertion and the only persons
who can reasonably be expected to remunerate him.
The members of other communities than that in
which a given laborer lives have not the control over
his product that would enable them to pay wages
therefrom ; besides, they are under obligations toward
their own neighbors who are wage earners. Any
reasonable determination of the duties that have to
do with the resources and opportunities of the earth
will hold each community responsible for the realiza-
tion of the wage-rights of its own members. Final-
ly, the existing distributive system, which by means
of certain psychical, economic, and social forces,
apportions the national product among the owners
of land, business ability, capital, and labor, deter-
mines the particular classes of persons upon whom
the obligation rests, and sets certain limits to their
power to discharge it.

Just as the obligation to provide particular labor-
ers with a Living Wage holds in general against
their own community, rather than other communi-
ties ; so it binds specifically the employer, rather than
238

OBLIGATION OF THE EMPLOYER

other economic classes of his community. All class-
es, landowners, employers, capitalists, and laborers,
are obliged to refrain from unreasonably hindering
the gaining of a decent livelihood by their fellow
men; but the refusal of landowners and capitalists
to pay a Living Wage to laborers who are not in
their employ cannot fairly be regarded as an unrea-
sonable hindrance. Since they do not own the
laborer's product, they are not in control of the
source from which, under the wage-system, labor is
remunerated. But the economic position of the
employer is such that the obligation falls naturally
and reasonably upon his shoulders. In the case of
industrial labor, he gets possession of and sells the
product; in the case of personal services that are
utilized solely by him, the obligation is still more
clearly his, inasmuch as he is the only beneficiary of
the laborer's exertions. To shift the wage-paying
obligation, or any portion of it, to other classes would
involve an essential change in the present industrial
system. The distribution of duties that would be
necessitated by vital changes does not concern us ;
we are dealing with the obligations that arise out of
the order now existing. Among all the economic
classes of the community, therefore, the employer
is primarily charged with the obligation of provid-
ing the laborer with a Living Wage because this is a
reasonable consequence of his position and function
in the economic organism. His refusal to fulfil it
can fairly be interpreted as an unreasonable inter-
ference with the laborer's right to get a decent liv-
ing from the resources of the earth.

239

A LIVING WAGE

Another method of describing the employer's
obligation turns upon the human dignity of the
laborer as an essential element of the wage-contract.
The employer is bound to compensate the human
exertion that he buys at its ethical value. He should
deal with it as the attribute, the output, of a person,
of a rational creature who is endowed with an inde-
structible right to live a decent human life. This
aspect of the thing that he buys ought to receive
explicit recognition in the contract ; that is, the con-
tract should be made on such terms that the dignity
of the laborer and his right to a decent livelihood
will be safeguarded.

According to a third view, the wage-paying func-
tion is a social one, delegated by society to the em-
ployer. Society, or the community, owes its labor
members a Living Wage in return for their social
services as workers, but it has transferred the obli-
gation to a special agency. The distributive func-
tion of the industrial organism has been specialized.
True, society has not, either in its political or indus-
trial capacity, explicitly commanded the employer to
pay a Living Wage, but this negligence does not re-
lease him from a duty that arises out of the very
nature of the function that he has undertaken to
perform. He accepts the task of social paymaster,
and is morally bound to discharge it in accordance
with the dictates of reason and justice.

Finally, the employer's obligation may be stated

in terms of social utility. As a social functionary

he ought to perform his task in a manner consistent

with social safety. Consequently, he is obliged to

240

OBLIGATION OF THE EMPLOYER

give his employees a wage that will enable them to
live decently, to marry, and to bring up a family in
conditions of reasonable comfort and security ; for
when any considerable section of its members fails
to reach this level, the security and the existence
even of society is endangered.

The last argument considers the worker's rights
and interests as mere means to social well being.
The second and third are fundamentally the same
as the first, since they assume that the obligation to
safeguard the laborer's right to a decent livelihood,
and to discharge this one of society's responsibilities
toward him, is a necessary corollary of the employ-
er's economic position. The last word of the ethical
argument, therefore, is the reasonableness of assign-
ing the duty of providing the laborer with a Living
Wage to the employer, rather than to any other
economic or social agency. If it be objected that
this principle is too indefinite, the answer must be,
none of the recognized titles of ownership rests on
a more definite or more urgent basis. What justi-
fication exists for John Brown's claim to the land
that he has been the first to occupy ? or has bought ?
or inherited? or to the crop that he has produced
therefrom ? And why should other men be denounced
as unjust when they prevent him from enjoying
these claims ? In other words, why are these morally
legitimate titles of property ? No final answer can be
given except that they are reasonable methods of
distributing the common heritage of nature, of de-
termining and concreting the general rights and ob-
ligations of men with regard to the common bounty

i6 241

A LIVING WAGE

of the earth. Under the wage-system the payment
of a Living Wage by the employer is an equally rea-
sonable method of concreting the laborer's general
right to a decent livelihood. And the obligation
binding the employer to perform this function is
just as reasonable and valid as the obligation which
constrains men to respect the traditional titles of
ownership.

Men who deny that the employer is under this
obligation may be comprised in two general classes :
first, those who maintain that the terms of the labor
contract constitute the sole measure of rights and
duties ; and, second, those who assert that the labor-
er's productivity determines his valid claims in the
matter of wages. To the former contention we can
only answer that every free contract is not necessar-
ily just. An agreement to rob or kill for a price is
legitimate neither in morals nor in law. The man
who consents to pay blackmail rather than suffer
injury to his reputation enters a free contract, yet
the other party to the contract is guilty of an act of
injustice. When a body of consumers is forced to
pay an extortionate price for a monopolized com-
modity, they are given the benefit of free contracts,
which nevertheless all reasonable men pronounce
unfair. Those in control of the monopoly are con-
demned as unjust because they take an undue ad-
vantage of the necessities of their fellows. Now the
employer who makes use of the dire need of the
laborer in order to force him into a wage-contract
that is incompatible with reasonable living, commits
precisely the same offense; for it cannot be main-

242

OBLIGATION OF THE EMPLOYER

tained that the laborer is free to reject the terms
offered and get his Hving in some other way. No
such alternative exists practically. Individual work-
ingmen may change their abode and their employ-
ment, but other individuals must take their place.
The class remains. While the present industrial
system exists every community must contain a body
of laborers and a body of employers. And the mem-
bers of both groups depend upon labor contracts for
their livelihood. Hence, these contracts ought to
be made in such a way that the natural rights of the
participants to a decent living will be provided for
and safeguarded. This is a moral limitation im-
posed upon the wage-contract by the very nature
of existing industrial institutions.

The contention that the laborer ought to be re-
warded according to his productivity, may mean
three different things. Productivity may be inter-
preted as the value of the product that comes into
being as the result of the activity of any particular
laborer; as the productive power of one worker
relatively to that of another; or, as the productive
importance of labor in comparison with the other
factors of production. Let us examine each inter-
pretation separately.

If the value of the laborer's product be taken as
the just measure of his remuneration, he ought to,
as in fact he usually does, receive an increase of wa-
ges when his product sells for a higher price. Yet he
works no harder than before, turns out no more pro-
duct than before. His additional compensation bears
no relation whatever to any quality or achievement,
243

A LIVING WAGE

physical or moral, of the laborer himself. Now a
theory of justice that measures a man's desert, his
rights, by conditions for which he is in no wise
responsible, and which takes no account of his hu-
man dignity, stands refuted as soon as it is stated.
It may be a canon of expediency ; it is certainly noc
a canon of justice. If, however, it be maintained
that there is no obligation to pay the laborer more
than the value of his product because there is no
possibility of doing so, no objection can be offered;
but this is merely a practical conclusion that would
follow from any theory of industrial justice that
might be adopted. It is consistent with the Living
Wage principle, and with the assertion that the
laborer ought not to be paid the value of his product.
The argument from productivity in the second
sense assumes that one man is paid more than an-
other because he produces more, and contends that
higher productive achievement is a valid reason for
higher remuneration. But in most cases it is utter-
ly impossible to measure the relative productivity of
different classes of workers. Does the bookkeeper
in the cotton factory produce more than the spinner ?
Or the locomotive engineer more than the "section-
hand ?" In the factory as on the railway, both class-
es of workers are essential to the existence of the
product, and their productive efforts have an organic
character. One could not function successfully
without the other, and there is no portion of the
finished product to which both have not in some
measure contributed. Each is in his own order a
cause of the whole product. Consequently, no part

244

OBLIGATION OF THE EMPLOYER

of it can be set apart as the exclusive creation of
either. We cannot say that the bookkeeper gets
more than the spinner because he produces more,
for we do not and cannot know whether the assump.
tion be correct. The difficulty is the same when we
consider laborers in different industries. Do the
skilled workers in an automobile factory produce
more than the common laborers who pave streets?
There is no third term by which the two products
can as such be compared. A basis of comparison
might be found in their relative general utility to
society, but this is not, strictly speaking, a test of
productivity. Besides, it would dictate that the
street laborers ought to receive higher wages than
the automobile makers. The relative productivity
of different workers can be ascertained only in those
cases in which all the conditions of work are pre-
cisely alike, when, for example, men use the same
kind of tools or machines. We can readily com-
pare the products of two coal-heavers who are
equipped with shovels of the same size, or of two
operators who use the same kind of sewing machine,
or of two bricklayers who work in equally advan-
tageous circumstances. When, however, the work-
ing conditions vary, and especially when every por-
tion of the product requires the activity of all the
producers whom we wish to compare, we cannot tell
to what extent one man is more productive than an-
other. As a matter of fact, different kinds of labor
are rewarded differently on account of differences
in the conditions of supply and demand. Wqrt:

245

A LIVING WAGE

bookkeepers as plentiful, relatively, as spinners
their remuneration would be as low.

The third interpretation of productivity as a meas-
ure of industrial desert holds that labor, and conse-
quently any particular group of laborers, is at present
rewarded in conformity with its importance rela-
tively to the other productive agents. The conten-
tion is evidently true if "productive importance" be
taken to mean relative scarcity in the actual circum-
stances of industry, for this is only another way of
saying that labor's share of the product is fixed by
the laws of supply and demand. When, as usuallv
happens, this phrase is employed to describe in some
vague way the relation of causality existing between
labor and the product, the theory is as impossible
of verification as the less ambiguous assertion that
labor is remunerated according to the portion of the
product that it creates in conjunction with the other
factors. As we cannot determine how much of the
joint product is due to each factor, so we cannot
measure their relative importance in the work of pro-
duction. The productive importance of the employ-
er is sometimes assumed to be indicated by the share
of the product that he actually receives, but this in-
ference from income to productivity is merely an
ordinary instance of the logical fallacy known as
"the vicious circle." ^ "What determines the em-
ployer's remuneration?" "His productive impor-
tance." "How can the latter be ascertained?" "By
referring to his remuneration." Those who take
the trouble to get behind formulas, and to examine

*Cf. "The Social Problem," by John A. Hobson, p. 160.
246

OBLIGATION OF THE EMPLOYER

the actual working of industrial forces, realize that
the income of any factor depends upon its "indis-
pensableness" and not on any proportion to its pro-
ductive efficiency. ^ When undertaking ability was
less plentiful than it is now, employers in competitive
enterprises received larger rewards ; therefore, their
productive importance was either exceeded by their
former profits or is at present inadequately remun-
erated. Undoubtedly the employer is in most cases
a more important productive factor than any single
laborer, as is easily shown by comparing the respect-
ive consequences of their withdrawal from an enter-
prise. The productive importance of different em-
ployers can likewise be partially measured by re-
ferring to the different results that are obtained
when they direct production with the same quantities
and qualities of land, capital, and labor. But it is
not possible to estimate the productive importance
of any employer, efficient or inefficient, relatively to
the productive importance of the entire labor force
under his direction. Mr. Mallock has made an in-
genious attempt to show that by far the greater part
of the product of modern industry is due to mental
ability (or simply Ability, as he writes it,) and that
labor gets more instead of less than it produces ; but
he cannot be said to have conspicuously succeeded.
He ignores almost entirely the advances in skill made
by labor during the last century, and the vast differ-
ences of directive ability required and displayed in
different industrial enterprises ; "ascribes" a certain
portion of the product to labor, and says that labor

^ Cf. Smart, "The Distribution of Income," pp. 237, 238.
247

A LIVING WAGE

must be "held to produce so much," when the ques-
tion, in so far as it has any ethical interest, is one
of objective fact, not of practical expediency; and
exaggerates the mental endowments of inventors,
and does not sufficiently distinguish between their
achievements and those of the employing class. ^

Even if the claim that labor is at present rewarded
in proportion to its productivity — in any sense of
which the term is susceptible — were irrefutably es-
tablished, the conclusion that labor is justly remun-
erated would not follow. "We might raise the ques-
tion, whether a rule that gives to each man his prod-
uct is, in the highest sense, just." ^ The question
must be answered in the negative. While a man
has an indisputable right to all the utilities that he
creates with the aid of his own materials and with-
out assistance from other men, his claim to be re-
warded in proportion to his activity is by no means
so clear when there is question of a joint product.
In the latter case productivity would seem to be the
lowest of all the titles of ownership. It is inferior
to eftort. Of two men who contribute to the crea-
tion of a common product and who have made equal
efforts and sacrifices, why should the stronger, or
more skilfull or more intelligent receive a greater
recompense than his less efficient fellow? The latter
has done his best, the former can say no more. It
is not denied that achievement ought to be considered

^ See his "Labor and the Popular Welfare," passim ; and
"Aristocracy and Evolution," Book III, ch. I. He has been
effectively answered by Mr. Hobson in the "Contemporary
Review," August, 1898.

* Clark, "The Distribution of Wealth," p. 8.

248

OBLIGATION OF THE EMPLOYER

to some extent in apportioning a reward among co-
operators, but it is maintained that our native sense
of justice always dictates that the distribution
should be made in accordance with individual merit,
good will, self-sacrifice, conditions that are within
the control of the workers, rather than aptitudes
and qualities for which they are not personally
responsible. This is certainly the standard by which
we hope to be judged in the Life Beyond. Measured
by the rule of efforts and sacrifices, the laborer, gen-
erally speaking, has as large a claim to remuneration
as the landowner, the employer, or the capitalist.
Again, the title of productivity must give way to
that of needs, which is the end to which all other
titles are but means. The primary reason why men
should own property of any kind is to be found in
their wants. By these must all other claims to
ownership be determined and conditioned. Since
all men are equal as persons, the essential needs of
personality are of equal moral validity in all. Hence,
the person's right to the minimum of goods necessary
to satisfy these fundamental needs is superior to any
of the merely secondary claims.

When the employer cannot pay a Living Wage he
is for the time being freed from actual obligation,
as no one is morally bound to do the impossible.
The contention that such a man ought to cease to be
an employer will scarcely hold in the face of the
hardship that he would thus undergo. A man's
fundamental right to get a living on reasonable
terms carries with it some kind of claim to remain
in the economic position in which he has become

249

A LIVING WAGE

established; and this claim will cease to exist only
in the presence of grave contrary reasons. On the
other hand, the inability of one or many employers
to discharge the obligation will not free those who
are better situated. The prosperous employer can-
not exculpate himself on the ground that he is pay-
ing as high wages as his neighbors. *

"Cannot pay a Living Wage" is, however, ex-
tremely vague. To one it may mean that if he does
so he will be unable to increase his personal expendi-
tures, or better his social position ; to another, that
the profits remaining will not be a fair remunera-
tion for his skill, energy, and directive ability; to a
third, that he will have nothing left with which to
extend his business or make new investments; to a
fourth, that he will not receive a fair rate of interest
on his capital. The first three of these interpreta-
tions are morally invalid because they imply a sub-
ordination of the essential needs of the laborer to the
non-essential needs of the employer. All the ends
that the employer seeks to realize in these three ways
lead ultimately to the satisfaction of wants that are
superfluous relatively to his present standard of liv-
ing. Now employer and employee are equal in per-
sonal dignity, and their essential needs are of equal
worth and moral importance. Consequently the
essential needs of one are morally superior to the
accidental needs of the other. The laborer's need
of the requisites of a decent and reasonable life is
more important in the moral order than the employ-
er's need of life's conveniences and superfluities. If

^ Cf. Verineersch, "Quaestiones de Justitia," pp. 579, 580.
250

OBLIGATION OF THE EMPLOYER

the individual's obligation to use and distribute the
resources of the earth consistently with the rights
of his neighbors thereto is more than a vague and
empty formula, it surely means in the concrete that
the employer is bound to distribute the product of
industry and his personal income in such a way that
his own secondary and unimportant wants shall not
be preferred to the primary and vital needs of those
who expend all their working time and energy under
his direction and for his benefit.

The industrial employer, the employer of men
who produce for the market, has obviously a right
to get a decent livelihood from his business. And
this means not merely goods absolutely necessary
for right living, but also conventional necessities.
Since the latter vary according to a man's station —
the position that he holds socially and economically,
and the scale of personal and family expenditure to
which he has become accustomed, — a decent living
for the employer will, as a rule, include more of the
good things of life than in the case of the laborer.
In both cases it corresponds with the standard of
life peculiar to the class. The absolute necessaries
of life are approximately the same for employer and
employee, namely, a reasonable minimum of food,
clothing, shelter, education, and recreation; their
conventional necessaries differ on account of the
different ways of living to which they have become
accustomed, and which they have come to regard
as essential. Undoubtedly the employer would suf-
fer a slighter hardship if his expenditure for things
conventionally necessary were diminished by, say,

251

A LIVING WAGE

ten per cent., than would the laborer whose outlay
for his conventional needs was curtailed in the same
degree ; yet the general statement remains true, that
the loss of conventional necessities entails suffering
upon both. Hence the rule above laid down does
no injustice to the laborer, since it merely treats
laborer and employer unequally in so far as they are
unequal, that is, in regard to their habits of living,
but treats them equally with reference to inconve-
niences that affect them equally. It is altogether just
that the employer should retain a sufficient amount
of the proceeds of his business to maintain himself
and family in reasonable conformity with the stand-
ard of living that he has come to look upon as proper
to his station. Until he has paid all his employees
a Living Wage he ought to refrain from all costly
expenditure for the purpose of amusement and re-
creation, and in general from everything that comes
under the head of luxurious living. The term lux-
ury is, indeed, very vague and very relative. No
general rule can be framed that will distinguish
sharply between luxuries and conventional necessi-
ties. Again, the different social classes in American
life merge into one another by insensible grada-
tions, so that men frequently regard the grade just
above them rather than the one in which they actual-
ly live, as the standard to which their expenditures
ought to conform. And yet, some general observa-
tions may be made which are sound and helpful.
The employer who cannot at the same time pay a
Living Wage to all his employees and live in his
customary manner, ought not to go beyond the
252

OBLIGATION OF THE EMPLOYER

moderate satisfaction of the physical, intellectual,
moral, and spiritual wants of himself and his family.
He ought to avoid all lavish feasting, all extrava-
gant forms of amusement, and all ostentation in
dress, equipage, and household appointments. His
right to satisfy any of these wants yields to the right
of his employees to the conditions of a decent liveli-
hood.

The claim of the employer to a fair rate of interest
on his capital at the cost of a Living Wage for the
laborers in his employ, likewise puts his non-essen-
tial needs above the essential needs of the latter, and
is consequently unsound. The right of capital to
obtain interest is sometimes asserted in such a way
as to indicate a belief that this is the supreme right
in the field of distribution. Capital is personified.
There should be no need to insist that capital is not a
moral and rational being, and can have no moral
claim to a share in the product. It is a condition of
production, but not a producer in the same sense as
the laborer and employer, nor has it any moral and
rational needs to be supplied out of the results of pro-
duction. Its claim to a portion of the product must be
made on behalf of its owner and in terms of his
rights. Now the only titles that justify the receipt of
interest by the capitalist are these two : the produc-
tivity of capital, and the sacrifice involved in ac-
cumulating instead of spending income.

The formula, res fructiiicat domino ("a thing

fructifies to its owner") unquestionably states a

general truth, but it must be dififerently interpreted

with regard to different kinds of property. A man

253

A LIVING WAGE

who, unaided by others, uses his own land, raw ma-
terial, tools, and machinery to bring into existence
a product, say, wheat or shoes, has a right to the
whole of that product, including the share of it that
represents the productive action of capital. In such
cases the owner's claim to the fruits of his property
is unconditionally valid. The utility produced by a
rented dwelling goes to the occupier immediately,
but redounds to the proprietor in the form of rent.
The latter gets the product of his property, inasmuch
as he is paid what is regarded as the product's value.
To him this virtual fruit rightfully belongs, as there
is no one else who can establish a shadow of counter-
claim. When a field or a building that is used for
commercial or industrial purposes, is hired out, its
fruits become merged in the general product and are
indistinguishable therefrom. They are, however,
assumed to be adequately represented by the price
that is paid for the use of their material cause. Here,
again, the owner reaps the virtual fruit of his prop-
erty. Similarly the interest that a man receives on
money he has loaned to a business man, for example,
a manufacturer, is regarded as the equivalent of the
product of the material capital into which the loaned
money has been converted. The owner of the money
receives the fruit of his virtually productive proper-
ty in the shape of interest. Whether these m.ethods
of measuring the product, according to which it is
valued in terms of rent and interest, ever represent
the precise physical contribution made by land and
capital to the combined product, cannot be known ;
but they are the only methods that are practicable.

254

OBLIGATION OF THE EMPLOYER

Now the right of the money lender to take this equiv-
alent of the fruit of his money is just as valid as the
corresponding right in the owner of the field, the
owner of the building, or the owner of capital instru-
ments. All of these claims are essentially the same,
namely, the claim asserted by the owner of a mate-
rial factor of production over the commercial equiva-
lent of the factor's product. Is this claim morally
valid? Our special concern here is with material
capital which the owner has purchased without the
assistance of a loan, and which he manages in his
capacity of employer and director of industry.

It seems clear that the right of such a man to the
imputed fruit of his property, in other words, to
interest on his capital, is as real and legitimate as
any other right of ownership. Who else can right-
fully claim this portion of the general product? Not
the laborer, for if we assume that his needs and ef-
forts are already fully remunerated, the only title
that can be urged in his behalf is that of produc-
tivity. Now it is true that the co-operation of the
laborer is necessary to make capital actually pro-
ductive ; but it is also true that the presence of capi-
tal causes the laborer's efforts to be followed by a
larger product and a higher wage than would be
possible if he worked alone. Consequently the laborer
is not the sole cause of the product. Some part of
it has been as truly produced by capital as some part
of a potato is produced by moisture. In so far as
this portion of the product is adequately represented
by interest, the latter cannot justly be claimed by
the laborer on the ground of productivity. Can it
255

A LIVING WAGE

be reasonably claimed by the consumer in the shape
of lower prices for the finished product? As director
of production, the capitalist-undertaker receives the
equivalent of his exertion in profits ; as capitalist, he
performs no labor nor undergoes any sacrifice when
he allows his capital to be used as a factor of pro-
duction; why then should he claim its product?
Does not the latter properly belong to the whole
people? The theory that is implied in these ques-
tions maintains that interest should be abolished, on
the ground that the productive forces of nature,
artificial as well as natural, cannot rightfully become
the subject of private ownership, but are the com-
mon property of the community. This being so,
the product of capital should go to the community,
and not to any one individual. To the community it
will go if no interest is paid and the price of the
product is reduced accordingly. Even in this theory
the principle, "to the owner of a thing belongs its
fruits," is acknowledged and asserted. The obvious
answer to the theory is that the assumption under-
lying it is unsound. There are in men certain in-
eradicable convictions, desires, and aspirations
which make it impossible that social welfare and the
welfare of the majority of individuals should be as
well conserved by common as by private ownership
of capital. Now what the race firmly believes to be
just and necessary in the matter of opportunities of
ownership must be taken as fairly representative of
objective justice; and social welfare must be accept-
ed as a sufficient justification of private ownership
of capital. After all, the primary title and reason of
256

OBLIGATION OF THE EMPLOYER

possession is the needs of men, and if these are
better provided for by the institution of private
property in the productive resources of the earth
the institution is morally legitimate. The question
of right at issue here does not hinge on any meta-
physical consideration of the intrinsic qualities of
capital-goods, but solely on the comparative utility
of the two kinds of ownership to attain the end of all
ownership. This principle, too, is admitted by the
opponents of private ownership ; for their opposition
is based on the assumption that human needs and
human welfare would be better subserved if capital
were owned collectively. If they are mistaken in
this, individual proprietorship of capital is right, and
the individuals may justly claim its product.

Again it must be insisted that we can never know
whether the productivity of capital relatively to that
of the other factors, is precisely expressed in the
rate of interest. Yet interest is the only available
measure of such productivity, and is, therefore, a
sufficient recognition of the moral principle, "to the
owner of a thing belongs its fruits."

This principle is valid, but it is not the only valid
principle of ownership. Consequently, a fair rate
of interest is not necessarily one that will yield to the
owner the full product of his capital. It is rather
that rate which will safeguard the right of the capi-
talist consistently with, and in subordination to, the
claims of needs, efforts, and the productivity of
labor. For the productivity of property, natural or
artificial, is the least and lowest of all the titles of
property. All the other titles are based upon the

17 257

A LIVING WAGE

personal dignity, personal exertion, or personal
achievements of their beneficiary: interest accrues
to the owner of capital without any reference to
his present needs, efforts, or achievements. The
employer's right to obtain the ordinary rate of inter-
est on his capital is, therefore, subordinate to the
right of his employees to receive the means of sup-
plying their essential needs in accordance with the
standards of decent living.

Concerning the second title to interest, it must be
noted that the accumulation of a great part of the
capital now in existence has not cost its owners any
real pain of abstinence. Some of it has been in-
herited, and some of it saved out of incomes that
were in excess of all the existing wants of the
recipients. None of the inheritors of wealth have
practised the self-denial incidental to continuous
saving, though a portion of them, namely, the bene-
ficiaries of small legacies, undoubtedly made some
sacrifice when they converted their inheritance into
capital, instead of immediately consuming it. But a
man enjoying a very large income suffers no notable
inconvenience when he devotes a goodly portion
of it to the purposes of production. As applied to
this kind of "saving," Lassalle's sarcastic comments
on the "abstinence theory" are fully justified. *

On the other hand, much of our present stock of
capital represents a real sacrifice of desires that
clamored for satisfaction when the saving took place.
According to Mr. Devas, even this species of saving

^ See his work, "Herr Bastiat Schultze von Delitsch," ch.
IV.

258

OBLIGATION OF THE EMPLOYER

"is amply rewarded without any need of interest or
dividends. For the workers with heads or hands
keep the property intact, ready for the owner to
assume whenever convenient, when he gets infirm
or weak, or when his children have grown up and
can enjoy the property with him." ^ Saved wealth
cannot, indeed, be continued in existence unless it is
embodied in material goods ; money must be either
spent or converted into capital-instruments ; and yet
there is grave reason to doubt whether all of those
who save at the expense of present desires would re-
gard the mere preservation of their wealth as suffi-
cient recompense for the abstinence undergone. It
would seem that those savers who do not take this
view have a just claim to an additional remunera-
tion in the form of interest, — unless sufficient capital
would come into existence without their contribu-
tion. In that case they would be in the position of
those who make sacrifices to produce something
that society does not want.

No definite answer can be made to these questions
of fact, and, so far as our present purpose is con-
cerned, none is necessary. Even those employers
who have accumulated capital at the cost of self-
denial, and who would not have saved had there been
no prospect of interest, have a less urgent claim to
interest than have their employees to a Living Wage.
When both claims cannot be satisfied, or fully sat-
isfied, the former must yield. For the supreme
title of ownership is that based on the dignity of the
person, on his essential needs; and the employer is

^"Political Economy," p. 507, 2d edition.
259

A LIVING WAGE

morally bound to so distribute the product of his

business that, after he has taken out the requisites
of a decent living for himself, the claims of his em-
ployees to a Living Wage will be fully satisfied, even
to the complete neglect of such claims as unusual
productivity of labor, the productivity of his capital
and his sacrifices of saving.

The obligation that in private business rests upon
the employer is distributed in a corporation, or joint-
stock company, among all the shareholders. Since
the direction of the business resides ultimately in
them, they are the real employers, and they cannot
reasonably shirk the responsibility of paying just
wages. This responsibility falls in a particular man-
ner upon the board of directors and the officers, but
it extends in some degree to the owner of even one
share of stock. Like the private employer with re-
gard to the money that he has invested in his busi-
ness, the stockholders of a corporation are morally
bound to pay all the employees, including, of course,
those who are actively engaged in its direction, a
Living Wage before they pay themselves dividends.
And it would seem that those shareholders whose
labor of direction is confined to annual or semi-
annual meetings, and who have no means of living
except the dividends accruing to them, have a less
urgent right to receive a decent livelihood there-
from than have the employees to obtain a Living
Wage. The needs of the latter are no more im-
portant than the needs of the non-working stock-
holders, but they are associated with labor, personal
effort, which is a stronger title of ownership than
260

OBLIGATION OF THE EMPLOYER

the productivity of capital or past sacrifices of sav-
ing.

To sum up : the obligation to pay a Living Wage
falls upon the employer as a reasonable consequence
of his position in the economic organism. From this
responsibility he cannot free himself by appealing
to the labor contract or to the productivity of labor ;
for the former is consistent with extortion, while the
latter is usually unknowable, and is always inferior
to needs as a canon of distribution. Inability to per-
form the obligation suspends it, but inability must
not be so interpreted as to favor the superfluous
needs of the employer at the expense of the essential
needs of the laborer. The employer's right to obtain
interest on the capital that he has invested in his
business, though real, is subordinate to the laborer's
right to a Living Wage.

Note to Second Edition. — The claim of the
employer to State aid whenever he is unable to pay
a Living Wage and at the same time obtain interest
on his investment, is unsound ethically as well as
economically. Competent employers will not need
such assistance, and incompetent ones have no valid
title to it. On the other hand, the employer who
cannot make a living profit and also pay a Living
Wage from his business, is not obliged to make up
the latter from property with which he has no con-
nection as an employer.

261

CHAPTER XVI.

The Obligation of the Loan-Capitalist^ the

Landowner, the Consumer, and the

Man of Wealth

The loan-capitalist and the landowner are under no
practical obligation to supplement directly the wages of the
underpaid laborer. The consumer can discourage the pay-
ment of insufficient wages by refusing to patronize the
ofifending manufacturers and merchants. And he is moral-
ly bound to do so. The meaning of "superfluous" goods.
These ought to be given without reservation for the relief
of the underpaid. Methods by which such distribution
could be carried out.

The employer may fail to pay a Living Wage
either because he cannot or because he will not.
Does the obligation, thus unfulfilled, revert to other
members of the community? to whom? and in what
measure ?

Undoubtedly a part of the responsibility of treat-
ing the laborer justly is shared by the capitalist who
has loaned money to the employer for use in his
business, and by the landowner who has rented him
land for the same purpose. They are beneficiaries
of the laborer's exertion, and consequently are in-
debted to him in a particular way ; they also receive
a portion of the product of industry, and are thereby
262

OBLIGATION OF THE CAPITALIST

enabled, in many cases, to do something toward sup-
plying what is wanting in the laborer's remunera-
tion. Yet if the employer's failure to pay a Living
Wage is not due to inability on his part, it seems
sufficiently clear that the loan-capitalist and the land-
owner have no direct obligation to make good the
difference. In so far as their incomes surpass their
reasonable needs, they are, of course, bound to make
a righteous use of the excess ; but their economic
position scarcely obliges them to do more than exert
pressure upon the employer to compel him to dis-
charge fully his wage-paying jbligations.

When, however, the employer is really unable to
give all his employees the means of a decent liveli-
hood, the right of the loan-capitalist and landowner
to receive the product of their property in the form
of interest and rent seems to be inferior to the right
of the laborer to obtain a Living Wage. The latter
has contributed his labor power, the former have
contributed the use of their goods to the making of
the common product. In the distribution of the
product the claims of labor, personal effort, ought
to be preferred to those of mere ownership in the
product's material cause. Consequently, the em-
ployer should be allowed and constrained to provide
his employees with a Living Wage before returning
rent to the landowner or interest to the loan-capital-
ist This seems to be the theoretical justice of the
situation. An attempt to put it in practice would
probably be followed by greater evils than those
that are sought to be remedied. Let us assume
that the landowner and the loan-capitalist do their
263

A LIVING WAGE

share by instructing the employer to give them their
portions of the product only after he has fully
remunerated all the laborers. In a large propor-
tion of cases they cannot know whether the residue
is really insufficient to yield them the whole amount
of rent and interest conditionally stipulated. The
employer will in such circumstances be able to re-
tain for himself what he owes to them. Even if he
acts with entire honesty in this respect, he may, with-
out being compelled to, continue to sell his product
at a price that will render full payments of rent and
interest impossible. To be sure, if the loan-capital-
ist and the landowner could always be certain that
the employer did his best to make them a complete
return for the use of their property, their obliga-
tions, as above outlined, would seem to be actual
and concrete. As things are, however, their respon-
sibility toward the underpaid laborer who works
with their property must be discharged in some
other way.

When the employer's inability to pay a Living
Wage is due to the low price at which he is com-
pelled to sell his product rather than to his own in-
competence, the chief beneficiary is, of course, the
consumer. Yet the average consumer is wholly in-
dififerent to any responsibility toward the under-
paid producers of the cheap goods that he so vigi-
lantly and avidly seeks to secure. In this connection
the following paragraph from the pen of Mr. W. S.
Lilly is extremely suggestive :

"One afternoon I chanced to meet in Regent
Street three lady friends who had come up to town
264

OBLIGATION OF THE CAPITALIST

for shopping, and I remember their surprise and de-
light at finding in one of the estabhshments which
they visited shirt blouses, of a dainty kind, on sale
at half-a-crown each. They purchased a dozen, and
evidently regarded this cheapness as simply miracu-
lous. They were so good as to invite me to dine
with them that evening at a restaurant of which I
will not mention the name, for I have no desire of
advertising it. Nor indeed is that necessary. The
perfection of its cuisine and the excellence of its
wines have deservedly won for it a world-wide
reputation. It is as deservedly celebrated for its
high charges. I could not help noticing that on
the occasion of which I speak my kind hostess re-
ceived very little change from the five pound note
which she tendered in payment for our dinner. The
evening was fine : and after taking leave of my
friends I set out to walk to South Kensington.
When I reached Hyde Park Corner a carriage dashed
rapidly out of the Park, and a young girl, who was
walking just in front of me, was almost run over.
Apparently she had not noticed it : fortunately I had
seized her by the arm and pulled her back in time.
She seemed a good deal frightened and inclined to
be hysterical. A constable came up, and I looked
at him interrogatively, wondering whether she was
quite sober. He caught my meaning and after a
swift glance at her, said : *No, sir, it's not drink : it's
hunger. If she sits down for a bit she will pull her-
self together.' He helped her to a seat just inside
the Park and left her there, after a minute, murmur-
ing something which I did not quite catch abont
265

A LIVING WAGE

sending someone to her. The girl said to me : 'Thank
you for saving me ; I was nearly killed, I think' ; and
she shuddered. She was a slight, delicate-looking
creature, of plaintively prepossessing appearance,
neatly dressed, and quiet in manner. I replied:
'Yes, you had a narrow escape ; now that you have
recovered from your fright, shall I put you into a
hansom and send you home?' 'Thank you,' she
answered, 'but I mustn't go back yet: I have come
out to try to earn a little money; I spent my last
shillings in buying those shoes to come out in, and I
owe my landlady a fortnight's rent: I haven't been
able to get any work lately.' I inquired what she
worked at. She told me she made ladies' shirt
blouses, but could not live on what she earned in
that way ; she was paid four shillings for making a
dozen : it was the usual rate ; she worked for Messrs.

, mentioning the tradesmen whose shop my

fair friends had visited that afternoon. It is a
dictum of Renan that the miraculous is the unex-
plained ; and this was the explanation of those
miracles of cheapness at which my friends had
marveled." ^

The obligation of the consumer toward the under-
paid laborer involves two questions : can he do any-
thing to bring about better wages ? and is he moral-
ly bound to make use of whatever power he possesses
in this direction?

Since all production and trade are carried on with
a view to the wants of the consumer, the latter holds

^ "The Cost of Cheapness," "The Fortnightly Review," April,
1905.

266

OBLIGATION OF THE CAPITALIST

the dominant position in industry. Goods will be
produced of such quality, in such amounts, and
under such conditions of employment as he efifect-
ively demands ; that is, in accordance with his wishes
plus his readiness to pay the necessary costs. If he
says to the manufacturer or to the merchant, "unless
you pay your employees a Living Wage, I will not
buy your goods," his terms will be accepted. Conse-
quently an organization embracing the majority of
consumers, and employmg agents to ascertain the
wages that have been paid for the production of the
various commodities on the market and the prices
for which the latter must sell in order that the pro-
ducers may be decently remunerated, could soon put
an end to the evil of underpaid labor in industrial em-
ployments. While an association of such magnitude
is not inherently impossible, it is clearly impractic-
able, or at least so unlikely as to render serious con-
sideration of it a waste of time. As things are, the
consumer who wishes to discourage low wages must
act individually or as a member of local and incom-
plete organizations. When the goods that he wishes
to buy can be obtained from manufacturers and
dealers that treat their employees fairly, he can
patronize these in preference to firms that are unfair.
How is he to distinguish between the two classes of
employers? Not infrequently the necessary infor-
mation will come to him casually and through
various unrelated channels ; more often perhaps it
will be available through the systematic work of
Labor Unions and the Consumer's League. The
former affix their Union Label to those goods that

207

A LIVING WAGE

have been produced in accordance with their stand-
ard of remuneration, hours, workshop conditions,
etc. The Consumer's League also has a Label
which it puts upon articles manufactured in the con-
ditions that it regards as satisfactory, and a "White
List" of merchants who treat their employees fairly.
It may be assumed, therefore, that the producers of
goods that bear any of these marks of approval are
receiving, if not a Living Wage, at least a nearer
approach to it than their fellows in the same em-
ployments. Purchasers who call for these goods,
and especially those who affiliate themselves to the
Consumer's League, will contribute very materially
toward the encouragement of fair employers and
the discouragement of the unfair.

Is the consumer morally bound to exercise such
discrimination in making his purchases? He is not
directly responsible for low prices and low wages,
for he takes no active part in the making of either. ^
Yet he encourages the continuation of existing bad
conditions when he seeks out and patronizes the
dealers in cheap goods, regardless of the wages that
have been paid to the producers. The fact that he
is not primarily responsible does not acquit him of
all responsibility and all obligation ; for, as Dr. Cun-
ningham observes : "There is always this double
responsibiHty to be looked to, responsibility for not
doing our best to cure the evil, and responsibility
for its existence." ^ If a Living Wage is to prevail
in industry the consumer must provide the means

^ Cf. Webb, "Industrial Democracy," pp. 671-673, ist ed.
'"The Use and Abuse of Money," p. 157.
268

OBLIGATION OF THE CAPITALIST

of paying it. This is a function that he cannot
shirk or shift to others. He is obHged to pay a fair
price for the goods that he buys, and a fair price
necessarily means one that will enable the producers
to be decently remunerated. This elementary and
fundamental obligation is indisputable : the practical
question concerns the form that the obligation as-
sumes when a combination of forces, partly within
and partly without the control of the consumer, has
brought or threatens to bring wages below the mini-
mum of justice. Suppose the consumer finds him-
self so placed that the issue depends upon his action :
if he buys goods from A all the laborers will get a
Living Wage ; if he patronizes B — who is selling
more cheaply — they must continue to be underpaid,
since the returns are not sufficient to give them more.
Here there cannot be a shadow of doubt concerning
his responsibility to the laborer, and his obligation to
make his purchase from A. This hypothetical case is
in some measure realized to-day whenever a consum-
er finds it within his power to choose between mer-
chants who deal in goods that have been produced
under humane conditions and merchants whose goods
have involved injustice to labor. The difference
is one of degree only; for the actual consumer can
do something toward the abolition of insufficient
wages. What he can reasonably do in this direc-
tion he is morally bound to do, and the same is true
of the merchant in relation to different manufactur-
ers. The effects of any single individual may seem
insignificant, but the combined actions of all who
are in a position to exercise the discrimination here
269

A LIVING WAGE

advocated would lead to very large results. Be-
sides, the reform of existing conditions will not be
accomplished by any single agency or method; the
co-operation of many and diverse forces, persons,
and classes will be essential. Among all the classes
that might contribute to this end, the consumer is
perhaps the least conscious of his power and respon-
sibility. In the simpler economic relations of the
Middle Ages, when the consumer usually dealt di-
rectly with the maker of the goods that he bought,
the obligation to pay a price that would cover fair
wages was easily perceived and acknowledged.
To-day he is so far removed from the original pro-
ducer, the causes of low wages are so various, and
the whole mechanism of industry is so anarchic,
that he seldom gives a thought to the relation be-
tween himself and the man who ultimately makes
cheap goods possible. Yet to divide and obscure
responsibility is not to destroy it; consequently the
consumer is morally answerable for insufficient
wages in proportion to his power to make reasonable
efforts toward bettering them.

Thus far of the obligation of those persons who are
directly benefited by the toil of the underpaid labor-
er, and who stand in more or less immediate econom-
ic relations to him. Let us consider briefly that class
of persons who are bound to the insufficiently
remunerated workers, as to other sections of the un-
fortunate, by the general duty of charity or benefi-
cence. These are the possessors of superfluous
goods, the rich. From St. Paul * to St. Basil ^ ; from

^ "Let your abundance supply their want," II Cor. VIII, 14.
'"Are you not a despoiler, since you have made your owa
270

OBLIGATION OF THE CAPITALIST

St. Basil to St Thomas of Aquin ^ ; and from St.
Thomas to Pope Leo XIII,^ the Christian teaching
has been that superfluous goods are a trust to be
administered for the benefit of the needy. The
classification of private possessions, or private in-
come, made by St. Thomas indicates the meaning
that all Catholic authorities attach to the phrase,
"superfluous goods." A man's goods, he says, may
be divided into three categories : first, those that are
absolutely necessary to sustain life: second, those
that are required for the proper maintenance of
social position: third, those that are left over after
both of these ends have been met. ^ It is not easy,
however, to mark off the last named possessions —
those that are "superfluous" — from those of the
second category. The majority of men can readily
persuade themselves that their whole income is need-
ed either to support their present style of living, to
provide liberally for the future wants of themselves
and their families, or to better their present condi-
tion. "Bettering their condition," means for some
men the indefinite accumulation of wealth merely
for the sake of the consequent power and prestige,
and for some women the progressive ability to out-
shine their neighbors in extravagant entertainment,
dress, equipage, etc. It is admitted on all sides that

that which you have received to distribute?" Migne, "Patrologia
Graeca," vol. xxxi, col. 275.

^ "To give alms from one's superfluous goods is strictly
commanded," "Summa Theologica," 2a. 2ae., q. 32, art i.

^ "When one's necessities have been fairly supplied, and
one's position fairly considered, one is bound to give to the
indigent out of that which remains," Encyclical, "On the Con-
dition of Labor."

* "Summa Theologica," 2a. 2ae., q. ^^t art. 6.
271

A LIVING WAGE

luxury is reprehensible, but the principle of the rel-
ativity of luxury has been converted into the doc-
trine that luxury is merely expenditure in excess of
income. According to this interpretation, all in-
comes, except possibly a few of the very largest,
can be legitimately utilized in maintaining or ex-
panding the social position of their recipients. Utter-
ly insignificant, therefore, is the number of persons
who possess superfluous goods, and are held to the
duty of almsgiving or philanthropy. This apothe-
osis of groveling selfishness is not, however, peculiar
to our own time. In the last quarter of the seven-
teenth century, Pope Innocent XI condemned the
following propositions : "It is scarcely possible to
find among people engaged in worldly pursuits, even
among kings, goods that are superfluous to social
position. Therefore hardly anyone is bound to give
alms from this source." If these doctrines were
false then they are a hundred times false to-day. In
a general way it may be said that all of that portion
of a man's income is superfluous that cannot be used
for the satisfaction of his reasonable wants. As un-
reasonable must be regarded all wants whose satis-
faction involves injury to health, mind, or character.
Consequently, excessive quantities of food or drink ;
dyspepsia-breeding delicacies ; clothing, dwellings,
and household furnishings that satisfy the desire to
outdo one's neighbors in costliness and showiness,
instead of increasing comfort or developing the
esthetic sense ; indefinite amounts of idleness, amuse-
ments, entertainments, and travel, — are all unreason-
able and unjustifiable. They all spell deterioration

272

OBLIGATION OF THE CAPITALIST

and debasement, the pampering- of what is lowest in
man at the expense of what is highest. Good clothes
and good houses are legitimate and useful inasmuch
as they promote comfort, self-respect, and the ap-
preciation of the beautiful ; but they are clearly harm-
ful to character when they respond to the vulgar
desire to excel in what one has rather than in what
one is or what one does. Recreation, amusement,
social diversion, entertainment, and travel are all
helpful within certain narrow limits ; w'hen they
take up more than a small portion of a person's time
and attention they become not merely useless but
demoralizing. Indeed, the amount of money that
can be expended for the conveniences of life, the
ornamental and hedonistic side of life, consistently
with a due regard for health, mind, and character,
is very much smaller than the majority of men, rich
and poor, habitually assume. And everything be-
yond this belongs in the category of superfluous
goods.

Is a man obliged to devote the zvhole of his super-
fluous goods or income to works of benevolence?
Mr. Andrew Carnegie answers in the affirmative,
"This, then, is held to be the duty of the man of
wealth : to set an example of modest, unostentatious
living, shunning display or extravagance ; to provide
moderately for the legitimate wants of those depend-
ent upon him ; and, after doing so, to consider all
surplus revenues which come to him simply as trust
funds, which he is called to administer, and strictly
bound as a matter of duty to administer in the man-
ner which, in his judgment, is best calculated to pro-

i8 273

A LIVING WAGE

duce the most beneficial results for the community — •
the man of wealth thus becoming the mere trustee
and agent for his poorer brethren, bringing to their
service his superior wisdom, experience, and ability
to administer, doing for them better than they would
or could do for themselves." ^ The Reverend L.
Garriguet is substantially of the same opinion: "A
man is obliged to give to the poor all his superfluous

goods To keep back a portion of them, even

an inconsiderable portion, is to go against the order
of Providence and to retain for self what ought to
benefit the neighbor." ^ The position of these writ-
ers seems to be in harmony both with the law of the
Gospel and the dictates of reason. Catholic moral-
ists of authority generally deal with the matter some-
what more precisely. They divide human distress
into three classes : extreme, grave, and ordinary. A
person is said to be in extreme need when he is so
placed that he cannot, morally speaking, escape
death, or some almost equivalent evil, such as loss
of health or of limb, unless he is assisted by others ;
in grave necessity, when perils of this magnitude are
not actually imminent but merely probable, or when
things that are necessary cannot be procured without
great difficulty; in ordinary need, when extreme or
grave evils can be avoided by reasonable personal
effort, or when minor inconveniences must be suf-
fered continuously if assistance come not from with-
out. * The authorities that we are considering are
not agreed as to the proportion of superfluous goods

^"The Gospel of Wealth," p. 15.

' "La propriete privee ," tome II, pp. 40, 42.

^Cf. Lehmkuhl, "Theologia Moralis," vol. ii, No. 601.

274

OBLIGATION OF THE CAPITALIST

that ought to be given for the reHef of ordinary need :
many of them say that "something" must be given ;
others, that each possessor should give as much as
would be sufficient to remove all such need if all oth-
er possessors gave proportionately ; others, that two
per cent, of a person's income should be so expended ;
and still others, that two per cent, of one's super-
fluous goods would satisfy the obligation. They
seem to be virtually unanimous, however, in main-
taining that persons having superfluous goods are
morally bound to give away as much of these as is
required to relieve all extreme and grave need. ^
Practically, this would seem to mean that a man is
bound to devote his surplus income unreservedly to
the alleviation of such cases of extreme or grave
need as come under his notice. Now it can scarcely
be doubted that a large section, perhaps a majority
of the laborers who get less than a Living Wage are
in grave need as this phrase is understood by the
moral theologians ; for to be without the minimum
requisites of decent and humane living is certainly
as great an evil as the inability to live according to
one's social position, which the theologians use to
illustrate their meaning. "Necessitas gravis" is not
too strong to describe the distress endured by per-
sons whose habitual condition is to be insufficiently
fed, clothed, housed, and provided against sickness
and old age. Consequently the doctrine of the moral
theologians seems to be in substantial accord with
the views of Mr. Carnegie and Father Garriguet.
Obviously the obligation of distributing super-
^ Cf. Bouquillon, "De Virtutibus Theologicis," pp. 343, 344-
275

A LIVING WAGE

fluous goods among the underpaid workers would
not, except in extreme cases, be wisely discharged
by direct gifts of money. These would tend not
only to pauperize the recipients but to deter the em-
ployer and the consumer from making any effort to
improve existing wage conditions. Inefficient re-
muneration can be effectively supplemented by phil-
anthropy only through methods that reach this end
indirectly, A few such methods may be mentioned
here. The underpaid could be financially assisted
to organize and maintain Labor Unions. "The great
problem of poverty," says John A. Hobson, "resides
in the conditions of the low-skilled workman. To
live industrially under the new order he must organ-
ize. He cannot organize because he is so poor; so
ignorant ; so weak. Because he is not organized he
continues to be poor, ignorant, and weak. Here is
a great dilemma, of which whoever shall have found
the key will have done much to solve the problem of
poverty." ^ Two of these obstacles to organization,
namely, poverty and weakness, would be very con-
siderably reduced if means were available for the
support of organizers, the renting of halls for meet-
ings, the maintenance of a reserve fund, and for
various other expenditures that are essential to effi-
cient organization. Then, there is the matter of in-
dustrial education, provision for which is so meagre
in America, and so inferior to that of some European
countries. ^ Greater opportunities of industrial

^ "Problems of Poverty," p. 227.

^ Cf. "Labor Problems," by Adams and Sumner, ch. XI ; The
Seventeenth Annual Report of the Commissioner of Labor ;
and vol. xxiii of U. S. Consular Reports, "Industrial Educa-

276

OBLIGATION OF THE CAPITALIST

training would enable many young persons to rise
who under present conditions must enter the ovtr-
crowded ranks of the unskilled, and thus diminish
both the number of and the competition among the
underpaid. In the third place, attention may be
called to the unlimited amount of good that couid
be accomplished through the building and main-
tenance of hospitals for the treatment of insufficiently
remunerated laborers and their families. Sickness
always means distress, and it comes at some time or
other to all; but among the poor it is exceptionally
frequent and exceptionally burdensome and disas-
trous. "Unnecessary disease and death are mainly
active in bringing misery to the working classes and
especially to those in poverty. The well-to-do class-
es are relatively free from preventable, disease-pro-
ducing conditions of work and of living." "To the
poor sickness means more than illness. It means mis-
ery of the severest kind." "Sickness assumes a new
and more terrible meaning when one realizes that the
mass of wage-earning families are pathetically de-
pendent upon some one person's health." "It is a
fertile and lively cause of poverty, constantly active
and supremely powerful." "Among 10,000,000
well-to-do persons the number of yearly deaths is
probably not more than 100,000 ; among the highest
class of wage earners the number is probably not less
than 150,000; and among the poorest, or those in
poverty, the number is probably not less than 350,-
000."^ Adequate hospital accommodations and pro-

tion and Industrial Conditions in Germany."

^ From chapter IV of Robert Hunter's "Poverty."
277

A LIVING WAGE

vision for efficient nursing in the home, would miti-
gate and lessen these evils indefinitely. Finally, there
is a method that would perhaps be more direct and
more immediately fruitful than any of those already
mentioned. "The overcrowding of the population on
the acre in certain sections of Chicago exceeds that
of the densest portions of London. In New York
the conditions are three times as bad as they are in
London." "There are about 360,000 dark rooms in
Greater New York."^ An investigation made a few
years ago in Boston showed .that twelve per cent, of
the total number of persons in rented tenements, or
37,613 persons, lived in habitations "having poor or
bad outside sanitary conditions." ^ From the tables
of the Sixth and Seventh Annual Reports of the
Commissioner of Labor it is seen that out of 2,954
families in the cotton and woolen industries 538
lived in houses the average size of which was less
than four rooms, and that only 592 out of 1,782
families in the iron and steel industries occupied
dwellings averaging four rooms or more each. Con-
sidered from the viewpoint of comfort, health, or
morality, the housing of working people constitutes
one of the most acute and difficult of our modern
social problems. It provides a most fruitful field
for philanthropic and charitable effort. Money ex-
pended to enable the underpaid laborers to become
the possessors and owners of decent, comfortable,
and sanitary homes would contribute more effective-
ly to their permanent economic and moral better-

^ "Poverty," pp. 342-344.

' Eighth Special Report of the Commissioner of Labor, p.
421.

278

OBLIGATION OF THE CAPITALIST

ment than any other work of benevolence that could
be undertaken. The worker would not be utterly
helpless ; he would have at least a place of shelter
and a foothold in the struggle for existence. The
resulting gain in health, energy, courage, and am-
bition would aid him very materially in resisting the
forces that threaten to press him down, and in his
attempts to rise above his present level. This is a
consideration of the gravest importance ; for in the
words of Professor Walker : "Nothing, economical-
ly speaking, can save industrial society from pro-
gressive degradation except the spirit and the power
in the working classes to resist being crowded
down." ^

In these methods the loan capitalist and the land-
owner who profit directly by tl.^ existence of insuffi-
cient wages will find ample opportunity to discharge
the obligations that arise out of this condition. And
their obligations would seem to be graver than the
obligation resting upon the man of wealth who
stands in no such relation to the underpaid laborer.
The duty of the latter is solely one of charity, while the
duty of the loan-capitalist and the landowner seems, as
abready explained, to partake of the nature of justice.

Note to Second Edition. — To say that the em-
ployer is obliged to forego interest on his investment
until he has paid a Living Wage, while the loan-
capitalist is free from such obKgation, is, indeed, to
put the former at a disadvantage; but the balance
is restored in the statement that the loan-capitalist is
obliged to help the needy laborers in some other way.

^ " Elements of Political Economy," p. 266.
279

CHAPTER XVII

The Obligation of the Laborer

The limitation o£ their number by the underpaid. It
would increase the demand for their kind of labor, but in
the concrete it means immoral practices and anti-social
consequences. And it misplaces the responsibility for low
wages. To increase productive efficiency, and therefore
wages, is impracticable, except for a few individuals.
Saving and total abstinence could raise but a small section
of the underpaid to the level of a Livmg Wage. Organi-
zation, while most effective among the better-paid, can ac-
complish much even for the poorest-paid.

Having considered the obligations of all the other
economic classes relatively to the right to a Living
Wage and to the existence of insufficient wages, let
us glance briefly at the responsibility and obligation
of the laborer himself. What can the underpaid
worker do to raise himself to the plane of a decent
livelihood ?

A remedy for low wages that has for a long time
been recommended to the laborer, especially by econ-
omists, is the practice of what is somewhat euphe-
mistically termed "sexual self-restraint." ^ Former-

* Cf. Malthus, "Essay on Population," Bk. IV, chs. I-V ;
Roscher, "Political Economy," sec. 163 : Mill, "Principles of
Political Economy," Bk. II, ch. XII ; Hadley, "Economics,"
sees. 355-357-

280

OBLIGATION OF THE LABORER

ly it was preached to all sections of the laboring pop-
ulation, but it seems to be no longer thought neces-
sary to the welfare of the better-paid classes. All
the evidence at hand seems to show that these re-
produce much less rapidly than the poorest classes. ^
Throughout Northwestern Europe there has oc-
curred during the last thirty years a steady decline
in the birth-rate, but only among those workers who
are above the level of bare subsistence. If every-
day observation may be relied upon, the same condi-
tions obtain in America. It is the more prosperous
laborers that are consciously restricting their num-
bers, by marrying later and by reducing the size of
their families. While denying that the larger com-
forts enjoyed by the better-paid is the cause of the
lower birth-rate prevailing among them, President
Hadley admits that high comfort and low birth-rate
commonly go together. ^ It would seem that the
economically degraded propagate rapidly through
utter lack of ambition and a feeling of hopelessness.^
The result is that their kind of labor, unskilled
labor, continues to be excessively plentiful relatively
to the demand for it. Hence the vital importance
of lessening its supply through a diminished birth-
rate.

Considered apart from its moral and social conse-
quences, this remedy would undoubtedly be highly
efficacious. Other conditions remaining the same,
the wages of a group fall, or tend to fall, at every

* See the very significant statistics cited in "Industrial
Democracy," pp. 632-642, ist ed.
^"Economics," sec. 57.

'Walker, "Elements of Political Economy," p. 267.
281

A LIVING WAGE

addition to its membership, and rise, or tend to rise,
whenever increasing supply fails to keep pace with
increasing demand. If the laborers in the lowest-
paid groups should confine the number of their off-
spring within sufficiently narrow limits, the genera-
tion succeeding to their tasks would certainly be able
to command living wages. It is a simple question
of the quantative relation between demand and sup-
ply. Walker was so thoroughly convinced of the
necessity and utility of the measure that he recom-
mended the strengthening and development of any
economic desire that would crowd out the desire to
propagate. "Almost anything is better than that
the desire to propagate should not be, by some cause,
restrained." ^

As to the morality of this recommendation, it
must be noted in the first place that the laborer is
not, as is so frequently assumed, bound by any obli-
gation of justice to follow it.. The man who marries
and brings into the world children whom he cannot
maintain in the minimum conditions of decency, will
sometimes sin against prudence, but he violates no
rights, either of his wife, his offspring, or his fellow
laborers of the group to which he belongs. His
wife freely consents to the union; his unborn chil-
dren have no rights sufficiently potent to annul his
right of fatherhood ; and the right of his fellow
workingmen to the larger advantages that they would
obtain if fewer children were born to the group, is
inferior to his right to become the head of a family.
Indeed, it is doubtful whether even charity toward

* "Elements of Political Economy," p. 296.
282

OBLIGATION OF THE LABORER

his children or his fellows obliges the laborer to
forego the advantages and consolations of family
life in order that the hand of social injustice may-
fall less heavily upon them. It would seem that
charity does not bind at the cost of such great per-
sonal inconvenience.

Generally speaking, the underpaid laborer is not
only not obliged to abstain from or indefinitely post-
pone marriage, or to limit the number of his off-
spring, but is under obligation to do the very oppo-
site. Theoretically and hypothetically, these meth-
ods of preventing an over-supply of low-paid labor-
ers are excellent ; human nature being what it is,
they mean in actual life immoral practices and anti-
social consequences. The great majority of men
find it extremely difficult to forego marriage or
deliberately to postpone it for a long time, and remain
chaste. No man who is acquainted with the lessons
of history and observant of the ordinary and obvious
facts of the life about him will question this state-
ment. The practice of limiting the number of chil-
dren is immoral because in the overwhelming ma-
jority of cases it is accomplished by means of un-
healthful and unnatural actions. Reputable physi-
cians are unanimous in pronouncing these disgust-
ing devices a serious menace to health, while the
moralist condemns them as frequently criminal, /. e.,
the murder of the unborn offspring, and always per-
verse and degrading. They are perverse, inasmuch
as they defeat the primary end of marriage, conflict
with the standard of action decreed by nature, and
permit the beast in man to triumph over his higher
283

A LIVING WAGE

self; and they are degrading, inasmuch as they
brutalize the most sacred of marital relations, con-
verting husband and wife from co-workers with the
Creator into instruments of mutual gratification.

These precautionary measures are hurtful to so-
ciety because they promote egotism and enervating
self-indulgence among all classes, the unmarried, the
parents, and the children and because they portend
a stagnant or even a declining population. The
average man who refuses to marry, or who indef-
initely postpones marriage from a disinclination to
assume its burdens or a love of personal "independ-
ence," deprives himself of one of the most effective
means of developing the finer side of character. He
becomes self-centered and unsympathetic, and, gen-
erally speaking, is a poorer type of citizen than the
man who becomes the head of a family before he
reaches middle age. Only in the family is it possi-
ble for the majority of men to develop those social
feelings that are essential to the welfare of a demo-
cratic society. And the deliberate restriction of the
number of offspring fosters in the parents a love of
material goods and a self-indulgence which are fatal
to moral and intellectual improvement, while it re-
sults in children who are over-indulged and under-
disciplined, and who as men and women will be even
more devoted than their parents to selfish and mate-
rialistic ideals. As President Roosevelt declared in
his famous letter on "race suicide," and later on in
his address to a meeting of mothers : "If the men of
the nation are not anxious to work in many different
ways, with all their might and strength, and ready
284

OBLIGATION OF THE LABORER

and able to fight at need, and anxious to be fathers of
families, and if the women do not recognize that the
greatest thing for any woman is to be a good wife and
mother, why, that nation has cause to be alarmed
about its future." "The way to give a child a fair
chance in life is not to bring it up in luxury, but to
see that it has the kind of training that will give it
strength of character." The practice of the small-
family cult tends inevitably to a society whose mem-
bers will be incapable of that degree of self-sacrifice
without which mental and moral progress are im-
possible ; nay, more, to a society that will be mental-
ly, morally, and physically decadent. The disastrous
effects of the practices that we are considering on
the movement of population are already manifest.
A noted economist had advocated the importation of
French Canadians to replenish the national stock of
France. According to Sidney and Beatrice Webb,
"the dangers to be apprehended in Northwestern
Europe is not over-population at all, but a deliberate
restriction of population by the prosperous, more
intelligent, and more thrifty sections." ^ The low
birth-rate among families of native American parent-
age, to which writers have frequently called attention
of late, is nothing less than startling, "The rate of
child-birth has been decreasing with astonish-
ing rapidity among the native American-born

of our population, until it has reached a minimum ;
the number of children to the native American fam-
ily of all classes (and in this lies the danger) being
less than it is in any other country, France even not
^"Industrial Democracy," p. 641, 26. ed.
285

ALIVINGWAGE

excepted, which has long been known to be at the

point of stagnation Less than two surviving

offspring to reproduce the race for all native-Amer-
ican marriages." * Nor is this the whole story.
Notwithstanding the assertions of apologists for the
foreign-born couples, honest and intelligent observa-
tion shows that a considerable and rapidly growing
section of these are zealous imitators of the example
set by the native-born. Let the reprehensible prac-
tice be, as some of the economists urge, generally
adopted by the underpaid workers, native and
foreign-born, and we shall soon be compelled to con-
template a stationary if not a declining population.

Even from the purely economic point of view, the
remedy under discussion is of questionable value.
"Slow growth of population and quick growth of
capital," says Professor Clark, "offer the conditions
of rapidly increasing welfare for the working class-
es." ^ This statement ignores the fact that the de-
sire to become the head of a family and the necessity
of providing for wife and offspring, are two very
strong incentives to the expenditure of productive
energy and the accumulation of capital. On the
other hand, the selfishness fostered by aversion to
marriage and parenthood tends naturally toward
indolence and inertia.

The preaching of the doctrine of "sexual self-re-
straint" hinders a proper appreciation by the public
of the true character and causes of the evil of in-

^ Dr. George J. Engelmann in "Popular Science Monthly."
June, 1903.

^"Publications of the American Academy of Political and
Social Science," No. 3, p. 2.2.

286

OBLIGATION OF THE LABORER

sufficient wages, and obscures the responsibility of
society and the necessity of social action. ^ It like-
wise soothes the consciences of those individuals
who are at fault, and shifts the blame to the shoulders
of the innocent. Professor Ingram tells us that the
teaching of Malthus found favor in certain quarters
because it "tended to relieve the rich and powerful
from responsibility for the condition of the working
classes, by showing that the latter had chiefly them-
selves to blame, and not either the negligence of
superiors or the institutions of the country." - A
similar statement would hold true of some of the
advocates of the milder form of Malthusianism that
is preached to-day.

It is sometimes asserted that the underpaid laborer
could secure an increase of remuneration by increas-
ing his productive efficiency. Let him perform more
effectively his present task, and also endeavor to fit
himself for something higher. The adoption of the
former practice would mean an addition to the profits
of the business, and the possibility of additional com-
pensation for the workers. The employer might, in-
deed, insist on retaining all the extra gain, but he
could not resist the temptation to increase the total
additional profit by enlarging the number of his
employees. Thus a rise in wages would be inevit-
able, owing to the rise in the demand for labor. As
the theory is frequently put, the laborer would get
more because he produced more. The first objec-
tion to this proposal is drawn from the fact that a

* Cf . Maurice Block, "Les progres," p. 578.
'"History of Political Economy," p. 121.

287

A LIVING WAGE

large proportion of the low-paid workers are phys-
ically unable to put forth greater productive energy ;
in their case increased efficiency must be related to
better wages as effect rather than as cause. Second-
ly, the attempt would be almost wholly ineffective
unless it were made by all, or at least, by a majority
of the laborers concerned; otherwise the increased
competition for labor among employers would not
be sufficient to cause a general rise in remuneration.
The gains resulting from individual and isolated
efforts to increase productive efficiency would be
nearly all secured by individual employers. Now to
assume that the great majority of the underpaid
workers could be induced simultaneously to enlarge
their productive output, is to look for a unanimity of
action that no practical man would venture to hope
for in the case of any other social group. The first
condition of the success of any such attempt would
be a strong and numerically complete organization;
but if this class of laborers were thoroughly organ-
ized they could probably obtain a Living Wage with-
out increasing their productive efficiency. Even if
the desired unanimity of action were secured the
results would perhaps be disappointing. The en-
larged product might be more than sufficient to pro-
vide all the producers with a Living Wage if it sold
at the old prices, but experience shows that this con-
dition would not be realized. The lower selling
price of the product might justify only a very slight
increase in wages. All would depend on the ratio
that would exist between the reduction in price and
the increase in output. Thus, a mere statement of
288

OBLIGATION OF THE LABORER

the limitations of this proposal is sufficient to expose
its weakness as a general remedy.

The recommendation that underpaid laborers
should fit themselves for some higher kind of work
has some value in the case of individuals. Undoubt-
edly there are many men in the ranks of the un-
skilled who could accomplish something- in this di-
rection if only they were a little more energetic, a lit-
tle more ambitious, a little more hopeful. The ob-
stacles to be overcome, however, bulk so large in the
eyes of the worker that the plan is practicable for
only a few.

The practice of thrift and saving is another sug-
gestion that is frequently urged. Speaking general-
ly, this advice is good for all classes of men, but only
within certain limits. There is such a thing as over-
thriftiness and excessive saving, which are harmful
alike to the individuals practising them and to the
activity of production and industry. Waiving this
consideration, we can readily admit the great ad-
vantage to be derived from the possession of a per-
sonal reserve fund. It helps the workingman to
change his employment or his location whenever he
becomes aware of better opportunities elsewhere, en-
ables him to remain idle rather than immediately ac-
cept the terms offered by the employer, and increas-
es his bargaining power generally. For the major-
ity of the underpaid, however, saving to a degree
that would be effective supposes an unusual measure
of self-sacrifice, and cannot be regarded as a practic-
able method of betterment. It will be efficacious

19 289

A LIVING WAGE

chiefly in the case of individuals among the un-
married.

A particular form of saving that is sometimes
recommended with the utmost earnestness is ab-
stinence from intoxicating drink. It is undeniable
that the number of laborers, both well-paid and
underpaid, who are reduced to a condition of eco-
nomic wretchedness by this species of indulgence, is
deplorably large. And yet, even universal total
abstinence would go but a little way toward im-
proving the standard of living of the underpaid
workers. It would be very effective in those indi-
viduals whose expenditure for intoxicating drink is
considerably above the average, but for the whole
class it would realize only a small fraction of the
claims made by its more enthusiastic advocates. The
average amounts expended annually for intoxicating
liquors by families in certain industries are submit-
ted in proof of this statement : *

Industry

Income

Expenditure per

per family

family for drink

Pig Iron

$591.61

$17.61

Bar Iron

784.11

25.10

Steel

663.56

26.55

Bituminous Coal

550.30

18.09

Coke

572.57

20.25

Iron Ore

401.65

8.58

Cotton

637.76

15-98

Woolen

663.13

18.39

Glass

859.64

54.84

^ Seventh Annual Report of the Commissioner of Labor, pp.
854-857.

290

OBLIGATION OF THE LABORER

From this table it appears that the group of fam-
ilies whose income was lowest, $401.65, had by far
the smallest average expenditure for intoxicants,
$8.58 ; that the outlay of the four groups of families
whose annual income fell short of $600 averaged
only $16.13 for this purpose; and that, with the ex-
ception of those in the glass industry, none of the
families in receipt of a higher income were very ex-
travagant in the matter. Now if the four groups of
families just mentioned are typical of the underpaid
workers generally, it is certain that the practice of
total abstinence would not elevate them as a class to
the conditions of a decent livelihood, nor bring the
lowest sections of them out of poverty into meager
comfort. An addition of $16.13 to the annual in-
come of the families of all the underpaid would still
leave thousands of them below the level of reason-
able living.

Finally, there is the method of betterment fur-
nished by organization. A formal defence of the
necessity and utility of the Labor Union is happily no
longer necessary. The features of our industrial
system that render organized action indispensable to
the welfare of the laborer, and the large, numerous,
and varied gains that organization has brought him,
are so obvious that only the densely ignorant or the
hopelessly prejudiced can escape their cogency.
Economists no longer warn workingmen that all
combinations entered into for the purpose of raising
wages must necessarily and inevitably prove futile.
"Thus, economic authority to-day, looking back on
the confident assertions against Trade Unionism

291

A LIVING WAGE

made by M'Culloch and Mill, Nassau Senior and
Harriet Martineau, Fawcett and Cairnes, has humbly
to admit, in the words of the present occupant of
the chair once filled by Nassau Senior himself, that
'in the matter of Unionism, as well as in that of the
predeterminate wage-fund, the untutored mind of
the workman has gone more straight to the point
than economic intelligence misled by a bad meth-
od.' " ^ Professor T. S. Adams maintains, indeed,
that: "The majority of economists have never been
'against the Union,' and to-day professional econo-
mists are practically unanimous in maintaining the
usefulness and even the necessity of rationally con-
ducted Unions." ^ And the economic justification of
organization is well stated by Professor Adams:
"There is then an indeterminate share in the product
of industry which goes to the factor possessing the
greatest bargain-power. Successful bargaining
depends largely upon two attributes, commercial in-
stinct in estimating the highest bid that your antag-
onist can make, and the material power of holding
out until he is forced to make that bid. It needs no
discussion to show that the isolated laborer is woeful-
ly lacking in both these attributes. He does not know
what the employer can afiford to bid, and his mate-
rial wants are so pressing that he cannot afford to
hold out until the employer's most liberal terms are
forthcoming. 'In the long run,' said Adam Smith,
'the workman may be as necessary to his master as

^"Industrial Democracy," p. 653, ist ed.
* "Labor Problems," p. 241.

292

OBLIGATION OF THE LABORER

his master is to him, but the necessity is not so im-
mediate.' " ^ That organization has fulfilled in
practice the expectations of theory is sufficiently indi-
cated in the following excerpt from the Final Report
of the Industrial Commission: "An overwhelming
preponderance of testimony before the Industrial
Commission indicates that the organization of labor
has resulted in a marked improvement in the
economic condition of the workers." -

The effectiveness of organization is naturally
greatest where it is least needed, in the higher groups.
Here the workers are more intelligent, more self-
confident, more ambitious, more closely associated
in their work, better equipped financially to main-
tain an effective organization, and less exposed to
competition from without. Among the poorest sec-
tions of the underpaid the obstacles in the way of
organization are enormous. These workers are
very frequently deficient in the intelligence, self-
restraint, and mutual trustfulness that are essential
to the initiation and maintenance of concerted ac-
tion. Long hours at work and insufficient nutrition
deprive them of that leisure and energy that are in-
dispensable to the effective prosecution of the routine
work of an association. Scanty wages render ex-
ceedingly difficult the accumulation of a reserve
fund. The permanency of any organization that
they may form is threatened by the insecure char-
acter of their employment ; for their places can
usually be readily filled from the ranks of the unem-

* "Labor Problems," p. 242.
'p. 802.

293

A LIVING WAGE

ployed. The last condition is, in the opinion of
Sidney and Beatrice Webb, of itself sufficient to
render organization valueless for the unskilled.
"There is, in fact, for unspecialized manual labor a
practically unlimited 'reserve army' made up of the
temporarily unemployed members of every other
class. As these form a perpetually shifting body,
and the occupation of 'general laboring' needs no
apprenticeship, no combination, however co-exten-
sive it might be with the laborers actually employed
at any one time could deprive the employer of the
alternative of employing an entirely new gang." *
They refer particularly to England where the per-
centage of unempJoyment is much greater than in
the United States. However, even John Mitchell
declares : "It must be admitted that this problem of
the unskilled and untrained is intensely difficult, and
that it is only partially solvable by direct Trade Union
effort." 2

Still there is good reason to believe that the at-
tempts of even the poorest and weakest of the un-
skilled to maintain organizations are well worth
while and will be amply justified by the results.
However great may be the number of unemployed
who stand ready to take the places of those at work,
"there will always be a certain difficulty and loss in
replacing a united body of employees by a body of
outsiders, though the working capacity of each new
comer may be equal to that of each member of the
former gang." ^ Compared with the Unions exist-

^ "Industrial Democracy," p. 758, ist ed.
-"Organized Labor," p. 168.
^ Hobson, "Problems of Poverty," p. 114.
294

OBLIGATION OF THE LABORER

ing in the skilled trades, such associations as the low
grade and low-paid workers can support are neces-
sarily feeble, but they add something to the resisting
power of the individuals who enter them. This in-
crease in fighting strength may not always be pro-
ductive of positive gain, but it is usually effective in
arresting the forces that otherwise would reduce the
workers to a still lower level. Organization, more-
over, is frequently the means of compelling the pub-
lic to pay some attention to the grievances of the op-
pressed laborer, and to exert its influence, which is
very considerable, for reform. And the results of past
attempts to organize effectively the class that we are
considering have, on the whole, been encouraging.
"Trade Unionism," says John Mitchell, "has been
successful in raising one trade after another from
the profound slough of unskilled, unorganized, and
unregulated labor. Much work which was former-
ly absolutely unskilled and at which men were em-
ployed a few hours at a time, to be taken on or dis-
charged, fined or suspended at will, has now become
organized so that the men secure fair wages, and by
reason of that very fact earn and deserve them."^
Two notable examples are furnished by the garment
workers and the anthracite coal miners. The former
are apparently among the most helpless subjects for
organization, and yet they have by this means
achieved very substantial gains. ^ The union of all
the classes of workers employed in the anthracite
mining industry enabled them to carry on two great

^ Op. cit., p. 170.

' Cf. "The Sweating System," by Henry White, in Bulletin
No. 4 of the Bureau of Labor.

295

A LIVING WAGE

strikes within two years, the consequences of which
were an immense improvement in the condition of
all of them, from the highest to the lowest. This
particular Labor Union is a good example of the type
of organization that will prove most effective for the
underpaid. The Industrial Union — so called be-
cause it embraces all the employees of a give 'n-
dustry instead of being confined, as is the l^ade
Union, to those who work at a given trade or occupa-
tion— by making the cause of any one section the
cause of all, enables the low-paid and unskilled to
command the active co-operation of the higher
groups, and therefore to increase immeasurably their
fighting power. It affords a splendid opportunity
to the workers to create a real brotherhood of labor
in which the strong will help to bear the burdens of
the weak. And present indications are that it will
before long become the prevailing form of labor
organization in America.

Of the various forms of self-help discussed in this
chapter, "sexual self-restraint" is in practice im-
moral and anti-social; the increase of productive
efficiency, the practice of saving, and the exercise
of temperance are more or less effectual in individual
cases ; while organization provides the only method
from which anything like general results can be ex-
pected. It will not by itself obtain a Living Wage
for all the underpaid, but it will accomplish more in
this direction than all other efforts that the laborer
can make put together,

2g6

CHAPTER XVIII

The Obligation of the State

The policy of non-intervention false in theory and
discredited by experience. Concrete eflfects of govern-
mental restrictions. As the protector of natural rights,
the State ought to compel employers to pay a Living Wage.
Objections to the economic feasibility of a Living Wage.
And to the possibility of securing it by legal enactment.
Minimum wage laws are already in operation in Victoria
and in New Zealand. The State could extend the Living
Wage principle partially, and promote it indirectl}'.

The obligation of providing the laborer with a
Living Wage has been fully outlined in its individ-
ual and class aspects. There remains only the ques-
tion of the extent to which it rests upon the State.
That baneful heritage of the eighteenth century,
the doctrine that a minimum of State regulation of
industry means a maximum of industrial freedom
for the individual, no longer counts any considerable
number of adherents. It is demonstrably false in
theory, and it has been completely discredited in
practice. Negatively, liberty is absence of restraint ;
positively, it is the power to act and to enjoy. Now
the restraints to action and enjoyment are not all
political and legal ; consequently the individual may
possess the fullest immunity from governmental in-
297

A LIVING WAGE

terference, and yet be hindered by some other re-
straints, such as, the strength, cunning, or selfish-
ness of his fellows, from doing and enjoying those
things that are essential to reasonable life. When-
ever this happens, the absence of State intervention
means the presence of insuperable obstacles to real
and effective liberty. In a word, political and legal
freedom are not an adequate safeguard to the wel-
fare of the individual. As the Comte de Mun told
the French Chamber of Deputies : "Liberty does not
consist in a theoretical right, but in the possibility
of exercising it. The power to be free, in a regime
which puts the workingman's life at the mercy of
supply and demand ; which exposes himself, his wife,
and his children to the hardships of a competition
that knows no moderation; which sets no limit to
his exploitation except the interests of those who
employ him, — the power to be free in such condi-
tions, when the need of subsistence is so pressing as
to permit of no waiting, no choice, no hesitation,
does not exist and consequently the laborer is not
free." ^ The economic history of the nineteenth
century furnishes abundant proof of these state-
ments, and an overwhelming refutation of the non-
intervention theory. Perhaps the clearest and most
logical instance is to be found in the conditions pre-
vailing in the mines and factories of England before
the passage of the Factory Acts. ^

Some of the opponents of State intervention in

* Cited in Max Turman's "Le catholicisme sociale," p. loi.
Cf. the excellent analysis in chap. XI of Ely's "Evolution of
Industrial Society."

* See the references given in chapter I.

298

OBLIGATION OF THE STATE

industry may be conveniently classed with the juve-
nile bully who resents the "interference" of parent or
teacher in his relations with younger and weaker
boys, and with the burglar or highwayman who ob-
jects to the activity of the policeman. These are
the possessors of superior bargaining power who
realize that if government will only let them alone
they will be able successfully to exploit their weak-
er fellows. Their opposition is natural in the same
sense that selfishness is natural. Those who op-
pose State regulation of industry on higher grounds
than self-interest usually misconceive its concrete
efifects. From this point of view, laws may b^
divided into two classes : Those w^hich actually re-
strict the liberty of all or a majority of the citizens;
and those which limit the freedom of all potentiallv,
but of only a few actually. The first class regulates
the simpler, more frequent, and more general activi-
ties of everyday life, and puts some practical restric-
tion on the freedom of nearly every person. Yet
they bring to him more freedom than they take away.
For example, the ordinance forbidding a man to
monopolize the street or the sidewalk curtails to that
extent his liberty, but secures him the larger liberty
of immunity from the inconvenience that would be
produced by similar unreasonable conduct on the
part of his fellows. Jevons has well said that, "the
modern English citizen who lives under the burden
of the revised edition of the Statutes, not to speak
of innumerable municipal, railroad, sanitary, and
other by-laws, is after all an infinitely freer as well
as nobler creature than the savage who is always
299

A LIVING WAGE

under the despotism of physical want." ^ And the
more numerous and complicated social relations be-
come, the greater will be the necessity for regulation,
and the larger will be the practical freedom that
will result from wise regulation. The second class
of restrictions applies theoretically to all the citizens,
but practically impedes the liberty or activity of com-
paratively few, because it has to do with actions that
are beyond the reach of the great majority. A law
that forbids one hundred persons to do something
that ninety-nine of them could never have done in
any event, will not deprive the ninety-nine of any
valuable freedom. For instance, a statute compel-
ling all employers of railway labor to pay a certam
minimum of wages, or to carry goods and passengers
at certain maximum rates, would limit the freedom
of all persons who owned or operated railroads ; but
since those who are or can hope to become employ-
ers form but a small proportion of the whole number
of persons engaged in and afifected by this industry,
the liberty of the great majority would not be cur-
tailed in any vital way. On the contrary, the latter
section of the community would secure a wider
measure of freedom in larger economic opportuni-
ties. Now, it is to this class of regulations that all
the more moderate proposals for increased State in-
tervention belong. They would enlarge the con-
crete freedom of the majority, and diminish that of
the minority. They would afifect not so much the legal
independence of the individual as the distribution of

^"The State in Relation to Labor," p. 15. Cf. the keen
criticism of the "police theory of the State" in Huxley's essay
on "Administrative Nihilism."

300

OBLIGATION OF THE STATE

economic opportunities among different groups of
individuals.

As an abstract proposition, the State has both the
right and the duty to compel all employers to pay a
Living Wage. ^ The function of the State is to pro-
mote the social welfare. The social welfare means
in practice the welfare of all individuals over whom
the State has authority ; and the welfare of the in-
dividual includes all those conditions that assist in
the pursuit of his earthly end, namely, the reasonable
development of his personality. The primary busi-
ness of the State, then, is to protect men in the en-
joyment of those opportunities that are essential to
right and reasonable life. They may be summed up
in the phrase, natural rights. In addition to this,
the State is charged with the obligation of promot-
ing social prosperity. That is to say, its task is not
merely to provide men with the opportunities that are
absolutely essential to right living, but also to fur-
nish as far as practicable the conditions of wider and
fuller life. Since man's capacity for progress is
indefinite, the State will fail in its mission of further-
ing social welfare unless it does something toward
securing to him the external conditions of something
more than the minimum of reasonable personal de-
velopment. State activity in the first sense is main-
ly protective and restrictive ; in the second, auxiliary
and co-operative. - Now, a law requiring employ-

^ Cf. Vermeersch, "Quaestiones de Justitia," pp. 581, 582;
Lehmkuhl, "Theologia Moralis," I, p. 715, gth ed. ; Pottier,
"De Jure et de Justitia," pp. 262, 263 ; Pope Leo XIH, Encyc-
lical on the Condition of Labor.

' For discussions of the functions of the State, see : Bou-
quillon, "Theologia Moralis Fundamentalis," pp. 445-450, 3d

301

A LIVING WAGE

ers to pay a Living Wage would evidently be an in-
stance of State activity in the primary sense, for it
would be an attempt to protect natural rights, and
to provide one of the essential conditions of reason-
able human life. Even those who hold that the sole
function of the State is to safeguard individuals
against violence and injustice, in other words, to
protect life and property, could logically admit that
the enactment of such a law would not be an undue
exercise of power. To compel a man to work for
less than a Living Wage is as truly an act of injus-
tice as to pick his pocket. In a wide sense it is also
an attack upon his life. An ordinance prohibiting
this species of oppression would, therefore, be a
measure for the protection of life and property.

The question of the legal enforcement of a Living
Wage is, consequently, one of expediency. It has
two distinct phases. We may ask whether a uni-
versal Living Wage is economically feasible; and,
supposing it to be workable, whether legal enactment
could bring it about. The former inquiry does not
concern itself with the productive resources of the
country, since, as we have already seen, these are
ample to supply all the inhabitants with the requisites
of a decent livelihood, but with the consequences
that might be expected to follow the establishment
of a universal Living Wage in our present industrial
system. The difficulties that it suggests remain
substantially the same whether this condition be at-
tained through Trade Union action, the payment of

ed. ; Willoughby, "The Nature of the State," passim ; and Lilly,
"First Principles in Politics," passim.
302

OBLIGATION OF THE STATE

sufficiently high prices by consumers, or legal enact-
ment.

This question is frequently answered in the nega-
tive, on the ground that if all the laborers who are
at present underpaid were to receive a Living Wage,
there would be such a rise in the price of the goods
and services that they produce as to cause a cor-
responding decline in demand. Instead of insuffi-
cient wages, we should have the evil of insufficient
employment. President Hadley says that society,
that is, the consuming public, regards the making
of a certain amount of product as worth only so
much, and if compelled to pay more will diminish
the quantity that it consumes. ^ Professor Smart
maintains that the decreased demand would result
in the laborers being put on short time, so that their
Living Wage would prove a misnomer. ^ President
Hadley's contention is true in a general way, but it
is subject to two important qualifications. It im-
plies, or at least will seem to many to imply, that the
consumers look upon the low prices at which certain
products sell as a full and precise equivalent of the
fixed and necessary "worth" of these articles; and
it easily leads to an exaggerated idea of the part
taken by consumers in creating these prices. Why
do consumers regard certain products of underpaid
labor as worth no more than they now sell for ? Be-
cause the low wages resulting from excessive com-
petition among both employers and workers have
enabled these prices to become customary. As

* "Economics," sec. 406.

* "Studies in Economics," pp. 50-60.

303

A LIVING WAGE

Professor Smart points out, the proposition that
women's wages are low because the goods that they
turn out are cheap, puts — so far as the question of
primary causality is concerned — "the cart before the
horse." The initiative in reducing prices comes
from the producers not from the public. Once
prices are down, however, the public accepts them
so eagerly that to raise them and the low wages
underlying them, constitutes a very difficult prob-
lem. ^ This is the explanation of low prices and the
real significance of the consumer's estimate of the
"worth" of low priced goods. President Hadley
would, indeed, be one of the first to subscribe to this
view, but his language in the section referred to
above can be construed in support of an exaggerated
notion of the rigidity and significance of the evalua-
tions made by the consumer. That society regards
the prices that it pays for cheap goods as an "equiva-
lent" of the labor expended in producing them, is
true in the sense that it will not voluntarily offer to
pay more ; it is not necessarily true in the sense that
society would not pay more for these goods rather
than do without them. And this brings us to the
second qualification to be made concerning President
Hadley's statement, and likewise with regard to that
of Professor Smart. A rise in the price of an arti-
cle will always be followed by a falling off in the
demand for it, other conditions remaining unchanged.
If, however, it is accompanied by a corresponding
increase in the purchasing power of consumers,
actual and potential, there need be no diminution in
* "Studies in Economics," pp. 1 19-122.
304

OBLIGATION OF THE STATE

the amount sold. The prices of most of the neces-
sities of life have risen greatly in the last seven years,
yet the effective demand for them has not decreased.
The contrary has, in fact, occurred, thus exemplify-
ing the general rule that high prices mean greater
industrial activity and a smaller volume of unemploy-
ment. Whether the establishment of a Living Wage
in all the industries in which it does not now exist
would bring with it sufficient demand to continue or
increase the number at present employed, cannot be
mathematically determined beforehand. This much,
however, may be confidently affirmed : of the actual
and potential consumers affected, the richest section
would probably buy as much as they did before
prices rose ; another section would certainly re-
duce its consumption ; some of the laborers former-
ly underpaid would increase their consumption ; and
some of them would become consumers of these
particular goods for the first time. Hence the
effect of a rise in prices consequent upon the uni-
versal application of the Living Wage principle
would be less simple as well as less serious than the
statements of the above-mentioned writers seem to
imply.

A second objection is drawn from the assumption
that even though the higher range of prices should
cause no decrease in demand or in employment, it
would swallow up completely the rise in remunera-
tion. What the laborer gained in wages he would
lose in the higher cost of living. To put it technical-
ly, there would be a rise in nominal but not in real
wages. Sidney and Beatrice Webb have carefully

20 30s

A LIVING WAGE

examined this contention and given a thoroughly
satisfactory reply : "Mr. Herbert Spencer, in the con-
cluding volume of his Synthetic Philosophy, naively
makes this his one economic objection to Trade
Unionism. 'If,' he says, 'wages are forced up, the
price of the article produced must presently be
forced up. What then happens if, as now. Trade
Unions are established among the workers in nearly
all occupations, and if these Unions severally succeed
in making wages higher ? All the various articles they
are occupied in making must be raised in price ; and
each Trade Unionist, while so much the more in
pocket by advanced wages, is so much the more out
of pocket by having to buy them at advanced rates.''-
But this is to assume that the wage earners purchase
as consumers the whole of the commodities and serv-
ices which they produce. We need not remind the
reader that this is untrue. In the United Kingdom,
for instance, though the wage earners number four-
fifths of the population, they consume — to take the
highest estimate — only between one-third and two-
fifths of the annual aggregate of products and
services, the remainder being enjoyed by the prop-
ertied classes and brain workers. Even if a gen-
eral rise in wages, amounting to, say, fifty million
sterling, produced a general rise in prices to the ex-
tent of fifty million sterling, spread equally over all
products, it could not be said that the wage earners
as a class would have to bear on their own purchas-
es more than one-third to two-fifths of the addition-
al price. If the rise in price was not spread equally

* "Industrial Institutions," London, 1896, p. 536.
306

OBLIGATION OF THE STATE

over all commodities and services, but occurred only
in those consumed by the other classes, the rise in
wages would have been a net gain to the wage
earners. Only in the impossible case of the rise
occurring exclusively in the commodities consumed
by the wage-earning classes — these commodities
being as we have seen, only one-third to two-fifths
of the whole — would that class find its action in
raising wages nullified in the simple manner that
Mr. Spencer imagines? Hence, it is, that even if a
rise in the Standard of Life of the whole wage-earn-
ing class produces an equivalent general rise in the
price of commodities, the result must nevertheless
be a net gain to the wage earners." ^ With some
difference of degree, this analysis describes the
bearing of any rise in the price of their products up-
on that section of the American working class that
is at present underpaid. They are not the sole con-
sumers of their products ; hence a part of the rise
must be borne by others. Nor would these other
consumers, — laborers, salary-receivers, professional
classes, farmers, landowners, employers and capital-
ists,— be able to recoup by raising the price of their
products and services to such an extent that the net
gains of the heretofore underpaid workers would
all be absorbed in the additional price that they would
have to pay for the same amount of these products
and services as they formerly consumed. The
workers whose remuneration was raised to the Liv-
ing Wage level would not be in the same condition
of economic advantage, or disadvantage relatively to
^"Industrial Democracy," 1st ed., pp. 781, 782, note.
307

A LIVING WAGE

other economic classes as they were before the rise.
There is no more reason for expecting this outcome
than there was for the prediction, formerly made,
that all the gains effected by Trade Union action
would be neutralized by the higher prices that the
Unionists would be obliged to pay as consumers. As
a matter of fact, group after group have through
organization obtained increases in wages, without
suffering anything like an equivalent loss in the
purchasing power of their individual dollars. Ex-
perience has shown that whenever one economic
class has gained in money income at the apparent
expense of other classes, a part of the gain has been
not merely nominal, and a part of it has been not
only in appearance but in fact at the expense of the
other classes.

Thus far the discussion of both of the objections
that we have been considering, has proceeded on the
assumption that the rise in prices would be fully
equivalent to the rise in wages. The assumption
concedes too much. Part of the increased labor
cost would come out of interest ; part out of profits ;
part out of the saving effected through the elimina-
tion of incompetent employers ; and part out of the
increased efficiency of both labor and capital. Some
of the employers who found it impossible to pay a
Living Wage and at the same time obtain the usual
rate of interest on their own capital invested in the
business, would content themselves with a some-
what lower rate. They would do this rather than
go out of business. Some of those who were un-
able to pay the old rate on borrowed capital would

308

OBLIGATION OF THE STATE

offer a lower rate, thereby lessening the demand for
capital and exerting a downward pressure on the
rate of interest. And this downward pressure would
be reinforced by the action of those capitalist-em-
ployers who withdrew from business and threw
their capital on the market rather than accept a
smaller return from their investment. Moreover,
since competition is never perfect, and since some
business men do get money more cheaply than oth-
ers in similar circumstances, some of the borrowers
whom we are considering would succeed in renew-
ing their loans at a lower rate than that which gen-
erally prevailed. Some lenders would submit to
this condition in preference to the risk of faring
worse elsewhere. Finally, there are some employ-
ers who would be able and willing to take a part of
the added labor cost out of their personal profits.
That is, they would be willing to do so rather than
cease to be employers or attempt to saddle all the in-
creased expense on the selling price of the product.
To deny these general statements concerning the
capitalist-employer, the loan-capitalist, and the em-
ployer in his capacity of profit receiver, is to contend
that all the individuals of these three classes would
absolutely refuse to accept a lower return for their
money or their activity than they now obtain. It
is to maintain that of all the agents of production
only the laborer will ever submit to a reduction in
his share of the product. Needless to say, this
theory is contradicted by experience. Both interest
and profits have fallen, and there is no good reason
to think that they have already reached an irredu-
309

A LIVING WAGE

cible minimum. On the contrary, it is practically
certain that the general rate of interest must, inde-
pendently of the Living Wage question, suffer a
further decline. Perhaps a majority of the small
employers would not, or could not, continue their
present functions if their personal returns were
diminished; but this is by no means the case with
all. The situation in which employers who were
compelled to raise the compensation of their under-
paid employees to the plane of a Living Wage would
find themselves, is this : the sources from which the
additional wage-payments can be drawn are only
three, namely, the selling price of the product, in-
terest, and profits. Now the difficulty of raising
prices to a level sufficiently high — and of maintaining
them there — to provide for all the increased labor
cost, is so great that many employers will find it
easier and more satisfactory to secure a portion of
the necessary funds from one or both of the other
two sources. In the third place, some of the more
competent or better situated employers at present
pay substantially a Living Wage in circumstances
and industries in which their competitors generally
fail to do so, and could under other conditions take
care of a large proportion of the business now car-
ried on by the latter. When the Living Wage be-
came universal they would not find it necessary to
raise prices to any appreciable extent, while many of
their less competent competitors would be forced to
the wall. This "survival of the fittest" might pro-
ceed so far that prices would ultimately reach the
old level, owing to the satisfactory profits obtained
310

OBLIGATION OF THE STATE

by the "survivors" through the increased volume of
sales. At any rate, it is certain that a large number
of incompetent employers are now able to continue
their functions, not because their services are needed
by the community, but because they pay a smaller
wage than their competitors ; and that the elimination
of these from any cause whatever would reduce the
total cost of production, and enable their labor
force to find employment at better wages with the
more competent employers. In the fourth place, a
part of the increase in wages would be derived from
the increased productivity of the industries in which
the rise occurred. The higher wage enjoyed by the
laborers would give them a higher physical and
mental efificiency, and consequently a greater pro-
ductive power, while the increased labor cost of pro-
duction would compel business men to introduce
better machinery and a better organization of in-
dustry. ^ Most of the improvements of the last
century in methods of production seem to have
originated in the pressure exerted upon employers
and by the demands of labor. ^ As long as they
could secure the advantages of cheap production
through cheap labor, employers generally declined
to undertake the exertion, risk, and expense of dis-
covering or introducing new processes. A similar
condition obtains to-day in many of the industries
in which labor is underpaid, and a similar course
would be adopted by many employers if they found
it no longer possible to hire workers for less than a
Living Wage.

^ Cf. Gunton's "Wealth and Progress," passim.
' Cf. Webb, "Industrial Democracy," pp. 72^727, ist ed.
311

A LIVING WAGE

In general, it may be said that the arguments
against the economic feasibility of a universal Liv-
ing Wage are reducible to two. The first is that the
national product of food and other articles of neces-
sity and comfort would not be adequate ; the second,
that the machinery of distribution could not be so
modified as to achieve the desired result. It is dif-
ficult to see how any American economist can take
the former contention seriously. As pointed out in
an earlier chapter, our natural resources and pro-
ductive capacity are more than sufficient to furnish
the entire population with the requisites of a decent
livelihood. And the preceding pages of this chapter
have shown that the objections based on the difficulty
of obtaining the required modification of the dis-
tributive process are far from being conclusive.
They can all be, and have been, urged against every
effort that has ever been made, by Trade Union ac-
tion or otherwise, to better the condition of any group
of workers ; for they all turn on the supposed evil con-
sequences of a higher cost of production and higher
prices to the consumer. If there is any difference
between the economic and social effects of the gains
that labor has already struggled for and secured,
and those that would result from the universal appli-
cation of the Living Wage principle, it is a difference
only of degree. Yet experience has shown that
gains in wages invariably mean a real improvement
in the condition of those obtaining them, and rarely
involve any hardship worth considering to other
classes or to the community at large. The discus-
sion of this point may be fitly closed with a citation
312

OBLIGATION OF THE STATE

from two investigators of the very highest authority.
"We desire to emphasize the point that, whatever
poHtical objections there may be to the fixing by
law of a National Minimum Wage, and whatever
practical difficulties there may be in the way of car-
rying it out, the proposal, from the point of viezv of
abstract economics, is open to no more objection
than the fixing by law of a National Minimum of
Sanitation, or a National Minimum of Leisure, both
of which are, in principle, embodied in our factory
legislation. Indeed, a minimum wage, since it
would in no way interfere with the fullest use of
machinery and plant, or otherwise check productive
ity, would seem to be even less open to economic
criticism than a limitation of the hours of labor." ^

The obstacles to the legal enactment and enforce-
ment of a Living Wage in America are great, but
not necessarily insuperable. There is, in the first
place, that perverse individualism which prefers
irrational liberty and industrial anarchy to a legal
regime of order and justice. This spirit is still
sufficiently potent to render exceedingly difficult
those changes in the Federal constitution and in the
constitutions of the several states which would be
a preliminary requisite to any such legislation.
After the law had been enacted, the willingness of
the unemployed, always numerous in the class affect-
ed by the new statute, to sell their labor below the

^ Sidney and Beatrice Webb in "Industrial Democracy," p.
777, note, ist ed. Dr. Cunningham maintains that the verdict
of political economy is in favor of rather than against the
principle of a Living Wage. See his article in the "Con-
temporary Review," vol. Ixv, p. i6.

A LIVING WAGE

legal rate through fear of not obtaining employment
otherwise, would constitute a serious menace to its
successful enforcement. In the case of illegal agree-
ments entered into from this motive, both of the
contracting parties would be interested in violating
the law. Nevertheless there are good grounds for
believing that an honest and sustained attempt lo
secure a Living Wage by legal enactment would meet
with a fair measure of success. Public opinion is
changing very rapidly in its attitude toward govern-
ment regulation of industry, and especially with re-
gard to the question of legislative repression of
abuses. It is coming to see that unregulated com-
petition has proved itself inadequate to protect the
consumer against monopoly and extortionate prices,
and the producer against exploitation and starva-
tion wages. Very probably a large majority of the
voters of the country agree with President Roose-
velt that, if the Federal Government does not now
possess the power to regulate corporations adequate-
ly, the National Constitution ought to be changed
accordingly. Once an amendment of this character
has been effected, constitutional modifications em-
powering congress and the state legislatures to pass
a minimum wage law, could readily be obtained.
Thus the greatest of the obstacles to a Universal
Living Wage by legal enactment would have disap-
peared. After the law had been placed on the
statute books, organized labor and a large section of
the underpaid workers who were not organized
would be vitally and actively interested in its en-
forcement. The penalties attached to its violation
314

OBLIGATION OF THE STATE

could be made sufficiently heavy to deter all but the
boldest employers and the most reckless working-
men. Even if it were observed in the case of, say,
only one-fifth of the workers previously underpaid,
there would be so much gained, and according as
the public came to realize the reasonableness and
necessity of the new legislation, the proportion of
instances in which it was violated would rapidly de-
crease. Owing to differences in the cost of living
and other conditions, the greater part of such legisla-
tion would have to come from the several states
rather than from the National congress. Its terms
in detail and its enforcement could best be deter-
mined and secured through a commission, empow-
ered to adjust it to different industries and different
centres of population. Precisely the same principle
is embodied in the legislation which at present au-
thorizes state railway commissions to fix reasonable
rates for the transportation of passengers and
freight. Their power to lay down maximum rates
on the basis of a reasonable return from investments
is at bottom the power to limit, indirectly, of course,
the incomes of the stockholders. The wage-commis-
sions would attack the opposite extreme of industrial
injustice by fixing a minimum rate of remuneration
for the workingmen.

The principle of a Living Wage by legal enactment
is already being tested in the Minimum Wage Board
law of Victoria, Australia, and in the provision of
the Conciliation and Arbitration act of New Zealand
which empowers the court of arbitration to prescribe
a minimum wage in any industry in which it makes

315

A LIVING WAGE

an award. ^ In the former region it has been found
that when a fair average wage is fixed as the mini-
mum, competition among employers to get the best
possible hands for the money throws the less com-
petent out of employment. Through fear of not
obtaining work otherwise, many of the workers
whose efficiency is fully up to the average represent
themselves as disqualified by "age or infirmity" from
earning the minimum wage, and secure a legal per-
mit to sell their labor for less ; while others contract
for the legal rate, but return a part of their wages to
the employer. Similar evasions of the law have
been practised in New Zealand, though, it seems, in
a smaller proportion of cases. Now it is obvious
that any law requiring the payment of a minimum
rate of wages must include some provision whereby
workers of less than normal efficiency can obtain
legal authorization to accept a smaller remunera-
tion. Whenever the supply of labor is in excess of
the demand at the legal rate, some of the able-bodied
workers will, consequently, attempt to take ad-
vantage of the provision by unlawful practices. Il-
legal and secret agreements to give back a portion of
the wages to the employer will likewise be inevitable.
Yet the number of evasions of the law from these
two causes will — if any reasonable endeavor is made
to enforce it — ^be much smaller than the number of
cases in which less than the minimum rate would be
paid if the law did not exist. To put it the other
way, the proportion of workers obtaining the rate

^ See the articles by Dr. Victor S. Clark in the Bulletins of
the Bureau of Labor: No. 56, pp. 60-78; and No. 49, pp.
1203-1208.

316

OBLIGATION OF THE STATE

fixed as the legal minimum will be much larger with
the law than without it ; for in the latter case there
would be nothing to hinder employers from hiring
the whole body of efficient laborers at a lower rate
but purely economic forces, while in the former case
there would be the additional obstacle set up by the
legal prohibition. And the objection that some men
will always evade the law by handing back a part of
their pay to the employer in the form of rebate, ap-
pHes with equal force to the Union scale, which is
really a minimum below which the Unionist is for-
bidden to go; but no well-informed person rejects
on this account the principle of Unionism, or denies
that it has benefited the laborer. The practical
question is not whether a minimum wage law would
be violated — all legal enactments are violated in
some degree, — but whether it would not raise to the
level of decent living many who would otherwise be
forced to remain in a condition of economic wretch-
edness. As a matter of fact, the net results of the
law in both Victoria and New Zealand seem to be an
ample justification of its wisdom. "A fair examina-
tion of the Victorian minimum wage law," says Dr.
Victor S. Clark, ''must include the statistical evi-
dence as to its general effect upon wages and em-
ployment and the testimony as to its influence on
the general condition of the worker. If nobody had
been benefited by the law, it would hardly have sur-
vived nine years of amendment and legislative at-
tack There has been a general increase in the

pay of male labor equivalent to nineteen per cent.,

and of female labor to seventeen per cent., or about

317

A LIVING WAGE

5s. 9d., and 2S. 3d. ($1.40 and $0.55) per week,
respectively, in occupations under the determinations
of the boards." ^ Speaking of the arbitration law
of New Zealand, an important feature of which is
the provision fixing a minimum wage, the same
writer says : "With all its apparent defects the act is
a success beyond the expectation of many of its
early supporters." ^

Until such time as a general Living Wage law be-
comes a reality, the State could apply the principle
partially. The various legislative authorities, na-
tional, state, and municipal, should enact legislation
providing that all adult employees in the public serv-
ices, or employed by private firms on work done by
contract for the public, receive a wage adequate to
the decent maintenance of themselves and their fami-
lies. While the number of laborers affected by the
law would be comparatively small, the moral effect
on public opinion and on purely private wage con-
tracts would be very considerable. Similar legisla-
tion could without difficulty be enacted and success-
fully applied to all quasi-public industries of a
monopolistic character, such as, railroads, street rail-
ways, and telegraph, telephone and express com-
panies. Professor T. S. Adams maintains that a
compulsory arbitration law — which would necessar-
ily include the power to determine rates of wages —
covering these industries is immediately feasible. '
When it is recalled that in the highly prosperous
year of 1903 more than three-fourths of a million

^Bulletin No. 56 of the Bureau of Labor, pp. 70, 71.
" Bulletin No. 49 of the Bureau of Labor, p. 1255.
* "Labor Problems," pp. 325-331-

318

OBLIGATION OF THE STATE

adult males in steam railway occupations received
less than a Living Wage, the direct benefits to be
derived from this partial extension of the Living
Wage principle are readily perceived.

Several indirect methods may be mentioned
through which the State could extend the field in
which a Living Wage would prevail. The first is
legislation limiting the working day to eight hours,
and fixing the minimum age at which children would
be permitted to become wage earners at sixteen
years. The immediate effect of these measures
would be a diminution in product, and an increase
in the demand for labor. An increase in the price
of labor — a rise in wages — would follow necessarily.^
In general, the objections offered to this argument are
identical with those urged against a universal Living
Wage, namely, an increased cost of production and
a rise in the price of the finished product. They
will not be reconsidered in detail here. President
Hadley and Mr. John Rae argue that if a universal
eight hour regime is followed by a lessening in the
per capita production of the laborer, the diminished
product will but increase the number of those re-
ceiving insufficient sustenance. ^ Mr. Rae's conten-
tion that individual wealth cannot be increased by
diminishing individual production, is in one sense a
mathematical truism ; as an abstract and general
statement, it is untrue. A smaller product may be
so distributed that some individuals will receiv^e
more than they did when the product was larger.

* Cf. Gunton, "Wealth and Progress," pp. 240-265.

* Hadley, "Economics," sees. 450-454 ; Rae, "Eight Hours
for Work," chs. V and VI.

319

A LIVING WAGE

The curtailment of production and increase of in-
dividual profits that sometimes follow the consolida-
tion of competing establishments into a trust, affords
a familiar illustration. It cannot be too often re-
peated that with our present abundance of natural
and industrial resources, actual and potential, the
question of raising the remuneration of the under-
paid is only in a very minor degree a question of
production. It is almost wholly a question of dis-
tribution, of enabling one group of individuals to
secure a portion of the national product that is now
regularly obtained by other groups. "When ma-
chinery is replacing man and doing the heavy work
of industry, it is time to get rid of the ancient pre-
judice that man must work ten hours a day if he is
to keep the world up to the level of the comfort that
it has attained. Possibly, if we clear our minds of
cant, we may see that the reason why we still wish
the laborer to work ten hours a day is the fear that
we, the comfortable classes, may not go on receiving
the lion's share of the wealth which these machines,
iron and human, are turning out." ^

Two other methods of State action to which at-
tention will be called are housing and old age pen-
sions. "No problem," says a recent writer, "presents
so many startling aspects as the problem of the hous-
ing of the working people." The overcrowded con-
dition in which so many of them are forced to exist
involves the "destruction of home life, weakening
of parental influence, falling off of religious faith,
changed relation of the sexes, absence of privacy,

^ Smart, "Studies in Economics," p. 328.
320

OBLIGATION OF THE STATE

intrusion of strangers upon the family life, the use
in common of facilities of living where propriety
and decency demand the restriction to a single fam-
ily, the constant sight and sound of debasing influ-
ences from which escape is impossible." ^ The
State could build dwellings and sell them to the
worst off of the underpaid workers for less than
cost, on condition that they be paid for in small in-
stallments without interest. The direct gain in com-
fort to the beneficiaries of this action is obvious ; the
indirect gain in the form of self-respect, self-con-
fidence, hopefulness, and courage, ambition and
ability to contend for better wages and a higher
economic position, would be of even greater im-
portance. Finally, the State ought to give every
laborer who has become permanently incapacitated
for work through old age, and whose wages have
not been sufficient to make provision for his declin-
ing years, an annual pension. The man that has toiled
faithfully during all the vigorous portion of his life
has a valid cl^im against society for this amount.
It is, in fact, a part of the Living Wage that is due
him for his life work. A system of old age pensions
would, moreover, afford considerable relief to many
underpaid and moderately-paid workers who are now
burdened with the support of relatives that are no
longer able to earn their own living. Freed from this
charge, many of the former would enjoy a Living
Wage in the full sense of the phrase, while others
would approach it much more closely than they do

^ "The Housing Problem in American Cities," by Lawrence
Veiller, "Annals of the American Academy of Political and
Social Science," March, 1905.

31 321

A LIVING WAGE

at present. State relief of the incapacitated has be-
come an especially urgent problem in this machine
age, when the laborer's working life comes to a
close so much earlier than formerly. ^

These forms of State assistance would, of course,
entail a heavy financial burden and increased taxa-
tion. One method of providing the required funds
may be briefly touched upon because of its general
bearing on the problem of distribution. A progres-
sive tax on incomes and inheritances could be so
framed as to furnish the means of carrying out the
projects of housing and old age pensions on a very
large scale. The rate on inheritance would naturally
be higher than that on incomes. Speaking of the
former method of taxation, Andrew Carnegie has
written : "Of all forms of taxation, this seems to be
the wisest. Men who continue hoarding great sums
all their lives, the proper use of which for public ends
would work good to the community, should be made
to feel that the community in the form of the State,
cannot be deprived of its proper share. By taxing
estates heavily at death the State marks its con-
demnation of the selfish millionaire's unworthy life.

"It is desirable that nations should go much furth-
er in this direction. Indeed, it is difficult to set
bounds to the share of a rich man's estate which
should go at his death to the public through the
agency of the State, and by all means such taxes
should be graduated, beginning at nothing upon
moderate sums to dependents, and increasing rapidly

* Ct. The Final Report of the Industrial Commission, p. 733 ;
and Hobson's "Evolution of Modern Capitalism," ch. IX.

322

OBLIGATION OF THE STATE

as the amounts swell, until of the millionaire's hoard,
as of Shylock's, at least

'* * * The other half

Comes to the privy coffer of the State.' " *
The argument for a graduated tax, increasing in
rate with the size of the estate, is as valid in the
case of incomes as in that of inheritance. In both,
the rich man is compelled to give up to the com-
munity a larger percentage of his wealth than the
man of moderate means because the richer a man is,
the less hardship does he suffer when his possessions
are diminished by a given fraction. If it be objected
that to apply the proceeds of these forms of taxation
to the purposes here advocated, is to take from the
rich and give to the poor, the charge may be passed
over as correct in substance. It implies, however,
a false notion of the morality of the proposal. The
State is bound not only to protect its citizens in the
enjoyment of their natural rights to the effective
opportunity of gaining a decent livelihood by their
labor, but to compensate, as far as practicable, those
persons for whom it has failed to provide such op-
portunity. For this purpose taxes must be levied,
and they should be apportioned in accordance with
the resources of the citizens. ^

^"The Gospel of Wealth," pp. ii, 12.

* Socialism is not considered among the methods of State
activity for two reasons : first, because the discussion is con-
fined to the rights and obligations that rise out of the v/age-
system of industry ; and, second, because the writer does not
believe that Socialism is either practicable or desirable.

323

CHAPTER XIX

Summary and Conclusion

Resume of the main argument. Three important con-
clusions: (a) a complete scheme of distributive justice
is exceedingly difficult to formulate; (b) a universal Living
Wage would mean an immense improvement in social and
industrial conditions; and (c) the realization of it is less
difficult than the realization of any other plan that would
yield equal results.

The main argument of this volume may be sum-
marized as follows: the laborer's right to a Living
Wage is the specific form of his generic right to ob-
tain on reasonable conditions sufficient of the earth's
products to afford him a decent livelihood. The
latter right is, like all other moral rights, based on
his intrinsic worth as a person, and on the sacredness
of those needs that are essential to the reasonable
development of personality. Among the things to
which these needs point there is included a certain
amount of material goods. A man's right to this
indispensable minimum of the bounty of nature is
as valid as his right to life : the difference is merely
in degree of importance. Now when the man whose
social and economic function is that of a wage earn-
er has expended all his working time and energy in

324

SUMMARY AND CONCLUSION

the performance of some useful task, he has fulfilled
the only condition that in his case can be regarded
as a reasonable prerequisite to the actual enjoyment
of his right to a decent livelihood. The obligation
of providing him with the material means of living
decently rests in a general way upon all his fellow
men. That is to say, they are all under moral re-
straint not to do anything that would be an unreason-
able interference with his access to these means.
However, it is only those persons who are in control
of the goods and opportunities of living that are
practicably within his reach, who can effectively
hinder or promote his enjoyment of the right in
question. When they prevent him from peaceably
getting possession of the requisite amount of goods,
they are morally responsible for his failure to obtain
a decent livelihood. Their action is as unjust as that
of the majority of the first occupants of a No-man's
Land who should force the minority to work for a
bare subsistence. This specific obligation of the
class of persons that we are considering falls prima-
rily upon the employer ; for his economic position as
direct beneficiary of the laborer's exertion and as
payer of wages, renders this the only practicable
outcome of any reasonable division of the com-
munity's opportunities of living and of the corre-
sponding responsibilities. Nor can the employer
escape this duty of paying a Living Wage by taking
refuge behind the terms of a so-called free contract.
The fact is that the underpaid laborer does not tvUl-
ingly sell his labor for less than the equivalent of a
decent livelihood, any more than the wayfarer will-

325

A LIVING WAGE

ingly gives up his purse to the highwayman. It is
the superior economic force (which consists essen-
tially in the ability to wait, while the laborer must go
to work to-day or starve) possessed by the employer
that enables him to hire labor for less than a Living
Wage. And the employer who can afford to pay a
Living Wage is no more justified in using his supe-
rior economic strength in this way than he would be
justified in using superior physical strength to pre-
vent the laborer from taking possession of a sack of
flour or a suit of clothes that the latter had bought
and paid for. In both cases the laborer is deprived
by superior strength of something to which he has
a right. As a determinant of rights, economic force
has no more validity or sacredness than physical
force. The other economic classes in the commun-
ity, the landowner, the loan-capitalist, the consumer,
and the man of wealth, share the responsibility of
providing the laborer with a decent livelihood in a
secondary degree, and in accordance with the nature
and possibilities of their several economic positions.
Finally, the State is morally bound to compel em-
ployers to pay a Living Wage whenever and wher-
ever it can, with a moderate degree of success, put
into effect the appropriate legislation.

The discussion carried on and the considerations
suggested in the preceding chapters point to three
important conclusions which may briefly be set down
here. The first is that the determination of complete
justice in the field of economic distribution is be-
wilderingly difficult. According to the view of the
writer, the order of importance among the various
326

SUMMARY AND CONCLUSION

canons of distributive justice is as follows : the needs
of the worker ; the cost of preparation for tasks re-
quiring skill of any kind ; the legitimate risks of nec-
essary business enterprises ; the proportion of individ-
ual energy expended by the worker ; the disagree-
ableness of the work ; the productivity of labor ; and
the productivity of property, whether land or capital.
Most persons would probably agree that in any com-
pletely just scheme of distribution all of these factors
would have to be taken into account, but not all who
accepted the list would subscribe to this order. And
those who accepted this order, or any other order,
would find it well-nigh impossible to determine in
any particular case the precise degree of importance
that ought to be attributed to one factor, or canon,
relatively to the others. For example, men might
agree that disagreeableness of work is a higher title
to wages than productivity, and yet disagree as to the
precise ratio of importance that should be held to
exist between these two standards. Even if all the
difficulties involved in the problem of a completely
just remuneration of the different agents of produc-
tion were removed, there would still be the question
of the just claims of the consumer. Are all the bene-
fits resulting from improvements in production to
go to the agents of production? or, should the con-
sumer share them in the form of lower prices? and
if so, in what proportion? Here we have a conflict
between the productivity of the producers and the
needs of the consumers which will occur continuous-
ly, and for the adjustment of which it is practically
impossible to lay down objective rules.
327

A LIVING WAGE

Tne second conclusion to be drawn is that the
universal application of the Living Wage principle
would cause an immense improvement in our in-
dustrial and social conditions. It would mean an
increase in various degrees, in the remuneration of
more than sixty per cent, of the male adults em-
ployed in urban occupations, or, probably, seventy
per cent, of those 'n all occupations. It would go
very far toward rei loving those plague spots of our
cities in which thousands upon thousands of human
beings are able to obtain only a fraction of the
requisites of physical health and comfort, and are
foredoomed from infancy to mental and moral de-
generacy. Of the millions who are now above these
lowest economic depths and yet below the plane of a
decent livelihood, thousands would be freed from
the necessity of working at an age at which they
ought to be in school ; thousands who at present can
command only the bare necessities of living would
realize for the first time the meaning and the bless-
ings of moderate comfort; thousands of men who
are able to provide for the present wants of them-
selves and families, but can lay by nothing for the
contingencies of the future, would be lifted out of
this depressing condition; and thousands of young
men who cannot now contemplate marriage would
be able to become heads of families and live as nor-
mal human beings. For a large proportion of those
who are at present underpaid, a Living Wage would
prove a stepping-stone to a still higher condition.
Our "perpetual danger of overproduction" would be
greatly diminished, owing to the enlarged consuming

328

SUMMARY AND CONCLUSION

power of the wage-earning class. For the same rea-
son a demand would be created for the services of
the greater number of these who are now constantly
unemployed. Finally, the nation's gain in physical,
mental and moral health, and in the increase of con-
tentment and good feeling among its citizens, would
ensure its continued pre-eminence among the world's
happiest, most vigorous, and most progressive peo-
ples.

In the third place, it may be safely asserted that
an earnest and systematic endeavor to extend the
Living Wage principle throughout the entire field of
industry, would be followed by a larger measure of
beneficial results than any other method of industrial
reform that could be pursued. The means that may
be efficaciously employed in this endeavor are briefly,
mor?l suasion and social effort. Both of them
are now unduly magnified and now unduly mini-
mized by partizan advocates. We are not in-
frequently assured that, "only religion will solve the
labor question." Most certainly it will not be per-
manently and adequately solved zvithout religion,
that is, without the aid of religious agencies and a
larger infusion of the religious spirit into the minds
and hearts of men ; but neither will religion suffice in
the absence of a detailed application of moral prin-
ciples to the relations of employer and employee.
Men may be religious in the ordinary meaning of the
term, and yet remain so thoroughly dominated b)'
the ethical code of unlimited competition that they
are blind to the many forms of moral wrong which
that code sanctions. There are thousands of employ-

329

A LIVING WAGE

ers in every church organization who wish to live up
to the standards of their respective denominations,
and believe that they are succeeding fairly well, who
nevertheless feel no conscientious scruples when they
pay their employees much less than a Living Wage.
They see no wrong in this, for are they not paying
the current rates? In other words, they conform to
the standard of business ethics, instead of to the
standard of Christian ethics. The moral suasion
that will produce results implies earnest, continu-
ous, and enlightened activity on the part of public
teachers and moulders of public opinion. If clergy-
men would give as much attention to preaching and
expounding the duty of paying a Living Wage as
they do to the explanation of other duties that are
no more important, and if they would use all the
power of their ecclesiastical position to deprive recal-
citrant employers of the church privileges that are
ordinarily denied to persistently disobedient mem-
bers; and if public speakers and writers who dis-
cuss questions of industrial justice would, in concrete
terms, hold up to public denunciation those employ-
ers who can pay a Living Wage and will not, — the
results would constitute an ample refutation of the
libelous assertion that employers cannot be got to
act justly by moral suasion. They have never been
made to feel a fraction of its power. The term,
social effort, is here used to describe the activity both
of private associations, such as Labor Unions, and of
the State. It is true that the efficiency of social
effort is limited by the character of the individuals
through whom the effort is made. If individuals
330

SUMMARY AND CONCLUSION

have not an intelligent grasp of the ethical principles
involved in the Living Wage question, and the will to
apply these principles in practice, their achievements
as an organization will be seriously diminished. But
it is also true that organized effort will add very
materially to the results that can be accomplished
through moral suasion addressed to individuals.
This very obvious general truth is superlatively true
in our time, when man's social relations have be-
come so numerous and so complex. Both methods
are necessary. There must be an appeal to the
minds and hearts of individuals, and the fullest
utilization of the latent power of organization and
social institutions. A reasonable and sustained en-
deavor to employ the two methods in extending the
Living Wage principle will accomplish more for the
laboring class, especially for its poorest-paid mem-
bers, than a like amount of effort expended in any
other way. Speaking comparatively, the remedy is
efficacious, and the means of putting it into effect
practicable.

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Martin-Sainte-Leon, E., Histoire des corporations des

metiers, Paris, 1897.
Marx, Karl, Capital. Translated by Moore and Aveling,

New York, 1889.
Mill, J. S., Principles of Political Economy, New York,

1896.
Mitchell, John, Organized Labor, Philadelphia, 1903.
Nicholson, J. S., Principles of Political Economy, New

York, 1887.
Nitti, F. S., Catholic Socialism. Translation by Mary

Macintosh, New York, 1895.
Palgrave, R. I., Dictionary of Political Economy, New

York, 1891.
Patten, S. N., Development of English Thought, New

York, 1899.

■ , The Consumption of Wealth, Philadelphia, 1901.

, Theory of Prosperity, New York, 1902.

Perin, Charles, Economie politique, Paris, 1896.
, De la richesse dans les societes chretiennes,

Paris, 1868.
Rae, John, Contemporary Socialism, New York, 1896.

, Eight Hours for Work, London, 1894.

Reinsch, Paul, World Politics, New York, 1901.
338

WORKS OF REFERENCE

Reports of U. S. Census, National and State Labor
Bureaux, and Congressional Committees.

Ricardo, David, Principles of Political Economy and
Taxation, London, 1895.

Robertson, J. M., The Fallacy of Saving, London, 1892.

Roscher, W., Principles of Political Economy. Transla-
tion by Lalor, New York, 1878.

Rogers, J. E. T., Economic Interpretation of History,
New York, 1889.

, Work and Wages, New York, 1889.

Ruskin, John, Unto This Last, New York, 1885.

Schoenhof, J., The Economy of High Wages, New York,
1892.

Seligman, E. R. A., Economic Interpretation of History,
New York, 1902.

Shuey, E. L., Factory People and Their Employers,
New York, 1901.

Sidgwick, Henry, Principles of Political Economy, New
York, 1887.

Smart, William, Introduction to the Theory of Value,
London, 1891.

, Studies in Economics, New York, 1895.

,The Distribution of Income, New York, 1899.

Smith, Adam, Wealth of Nations, New York, 1895.

Soderini, E., Socialism and Catholicism. Translation by
Shee, London, 1896.

Spahr, C. B., Present Distribution of Wealth in the
United States, New York, 1896.

Tarde, Gabriel, Psychologie economique, Paris, 1902.

Thompson, H. M., A Theory of Wages, London, 1892.
Toynbee, Arnold, The Industrial Revolution, New York,

1890.
Turman, Max, Le catholicisme social. Paris, 1900.
Vandervelde, E., Collectivism and the Industrial Revolu-
tion. Translation by Kerr, Chicago, 1901.
Veblen, T., Theory of Business Enterprise, New York,

1904.
Wagner, A., Grundlegung der politischen Oekonomie,
Leipzig, 1892.

339

A LIVING WAGE

Walker, F. A., Political Economy, New York, 1887.

, The Wages Question, New York, 1876,

Walter, P., Die Propheten in ihrem sozialen Beruf und

das Wirthschaftsleben ihrer Zeit, St. Louis, 1900.
Webb, Sidney and Beatrice, History of Trade Unionism,

London, 1902.

, Industrial Democracy, London, 1897.

Weiss, A., Apologie des Christentums, Freiburg, 1897.
Wells, D. A., Recent Economic Changes, New York,

1891.
Wieser, F. Von, Natural Value. Translation by C. A.

Malloch, London, 1893.
Willoughby, W. F., Workingmen's Insurance, New

York, 1898.

340

INDEX

Abstinence, and interest, 258-
260.

Adams, T. S., on labor organi-
zations, 292, 293; on compul-
sory arbitration, 318.

Antoine, C, on a Living Wage,
85, 86, IIS-

Aquinas, St. Thomas, on just
wages, 28; right to subsist-
ence, 69; ownership, 107;
superfluous goods, 271.

Aristotle, on ownership, 70.

Ashley, W. J., on medieval regu-
lation, 26; medieval criterion
of fair wages, 94.

Bargaining, unlimited, 3, 4.

Birth-rate, declining, 281, 285,
286.

Boehm-Bawerk E. von, on the
law of price, 192, 193.

Business Ability, relatively to
prices and profits, 209, 210;
to wages, 227, 233, 246, 247.

Capital, supply of, 215, 216 217-
221, 227, 233; rights of, 253.

Capitalist, description of, 211,
212; obligation of, 239; see
Loan-Capitalist.

Carnegie, Andrew, on duties of
the rich, 273, 274; inheritance
tax, 322, 323.

Castelein, A, on a family Liv-
ing Wage, 116.

Charity, and a family Living
Wage, III.

Children, rights of, 108, 109;
number of in family, 120-122.
132; minimum age of as wage-
earners, 133.

Christian Authorities, on fair
wages, 26-35; right to sub-
sistence, 69.

Clark, J. B., on capital and pro-
ductivity of labor, 174; ethical
value of productivity, 248; re-
striction of working popula-
tion, 286.

Clark, Victor S., on wage-
legislation in Victoria and
New Zealand, 317, 318.

Clothing, and the content of
a Living Wage, 134.

Community, industrial, obliga-
tion of relatively to a Living
Wage, 100-102, 190, 191, 238,

325.
Competition, effect of on wages.
16, 17; among different por-
tions of capital, 213, 214;
among laborers, 223-225, 230,

231-
Conditions, social and industrial,

and a Living Wage, 328, 329.
Consumer, obligations of, 264-

270.
Consumption, in relation to pro-
duction and prosperity, 168-

174.
Contemporary Opinion, on an

ethical standard of wages,

35-37-
Contract, free, as a determinant

of justice, 5, 10-15, 35-37. 242,

243. 325-
Corporations, and profits, 210;

obligations of, 260, 261.
Cost of Living, in certain in-

34^

INDEX

dustries, 139-147; effect of a
Living Wage on, 305-308.

Cultivation, extension of and
rent, 202, 203.

Cunningham, W., on influence
of medieval Christianity, 26;
injustice of economic extor-
tion, 36; responsibility for
evils, 268.

Custom, and wages, 4, 226.

Demand, and price, 192-198;
and interest, 215; and wages,
226, 232.

Devas, C. S., on content of a
Living Wage, 129; right to
interest, 258, 259.

Distribution, ethical, various
canons of, 74-80, 248, 249;
economic, laws of, 191, 192.

Duty, and rights, 50, 51; and
right to a Living Wage, 118,
119.

Economic Life, complexity of
and a Living Wage, 102-104.

Economists, on competition and
fair wages, 10-19; influence of
on legislation, 20.

Efforts, as a canon of distribu-
tion, 77, 248, 249.

Eight-Hour Law, effect of a
universal, 319, 320.

Employer, and obligation to pay
a Living Wage, 115, 238-242,
32s, 326; and free contract,
242, 243; and productivity of
labor, 243-248; and inability to
pay a Living Wage, 249-260,
262, 263 ; as affected by a
universal Living Wage, 308-
311; and by moral suasion,
330.

Equality, as a canon of distri-
bution, 75-78; between labor
and pay, 85, 86, 111-114; of
gains, as a criterion of jujt
price, 87, 90-94, 97.

Equity, and a family Living
Wage, 116.

Ethical Teaching, and a Living
Wage, 330.

Family, a Living Wage for,
110-122; size of normal, 119,
120; cost of living of, 139-
147; average income of, 180,
181.

Fertility, and rent, 199, 200.

Fichte, J. G., on rights, 64.

Food, and the content of a
Living Wage, 134.

Gilds, and the fixing of wages,
25.

Gompers, Samuel, on the con-
tent of a Living Wage, 129,
130.

Hadley, A. T., on competition
and wages, 17; overproduc-
tion, 168; wages and produc-
tivity, 183; effects of a rise in
wages, 303; eight-hour law, 319.

Hedonism, and natural rights,
52-54.

Hegelianism, and rights, 59, 60.

Hobson, John A., on rights of
productivity, 76; overproduc-
tion, 169-172; wages and pro-
ductivity, 183; imperialism,
188, note; the unskilled la-
borer, 276.

Hospitals, and the underpaid,

277, 278.

Housing, and the underpaid,

278, 279, 320, 321.
Hunter, Robert, on poverty, 175,

176, 277, 278.

Imperialism, and overproduc-
tion, 187.

Income, national, and a uni-
versal Living Wage, 178-181.

Industrial Training, and the
underpaid, 276, 277.

Industry, organization of rela-
tively to interest and wages,
219-221.

Ingram, J. K., on popularity
of Malthusian teaching, 287.

Interest, nature of, 211, 212;

INDEX

uniform rate of, 213, 214;
determination of, 215, 216;
and productivity of capital,
216, 217; and wages, 217-221;
ethical titles of, 253-260.

Jevons, W. S., on liberty, 299,
300.

Justice, and a family Living
Wage, III.

Just Price, and theory of value,
27, 28; and a Living Wage,
86-99.

Kant, Immanuel, on rights, 64.

Ketteler, Archbishop, and the
Living Wage doctrine, 34.

Labor, and a Living Wage, 79,
80; productivity of, 182-184,
196, 197, 227-231; supply of,
2i7-e2i, 227.

Laborers, unmarried, and a
family Living AVage, 120;
number of underpaid, 153-162;
prospects of underpaid, 162-
177; non-competing groups of,
223-226; the marginal and
wages, 229, 230; claims of
underpaid on other classes,
262-279; limitation of off-
spring by, 280-287; increased
efficiency of, 287-289; saving
by, 289; total abstinence and,
290, 291; organization and,
276, 291-296.

Labor Unions, and a Living
Wage, 37, 38; see Laborers.

Land, rent of, 199-207; supply
of and wages, 227, 233.

Landowner, and rent, 206; and
the laborer, 239, 262-264, 279.

Law, civil, and fixing of wages,
2, 19-21, 23-25, 38, 39; en-
forcement of a Living Wage
by, 313-319-

Law, economic, nature of and
relation to rates of wages,
7-10.

Leo XIII, Pope, on a Living
Wage, 32, 33, no. III.

343

Liberty, individual, influence of
ideal of, 12, 13, 19-21; equal,
as the measure of rights, 64;
relation of to State regulation
of industry, 297-300.

Lilly, W. S., on consumer and
underpaid worker, 264-266.

Livelihood, a Decent, the right
to, 72-80, 324, 32s; the basis
of right to a Living Wage,
99. 100, 117, 118; difficulty of
measuring, 123-125; absolute
and relative, 125-127; in terms
of goods, 127-136; in terms of
money, 136-150; in the case
of the employer, 251-253.

Loan-Capitalist, obligations of,
262-264, 279; effect of a uni-
versal Living Wage on, 309.

Location, effect of on rent, 200,
201, 205.

Luxury, and a Living Wage,
184-186; and obligations of
the employer, 252, 253; and
obligations of the rich, 272,
273-

Machinery, displacing men, 166-
168; causing overproduction,
168-174; latent possibilities of,
187-189; and the rate of in-
terest, 216, 217.

Marriage, and a reasonable life,
117, 118.

Marshall, Alfred, on economic
law, 7, 8; the content of a
Living Wage, 128; consump-
tion and productivity, 184;
luxury, 184.

Marx, Karl, on value, 196, 197.

Middle Ages, and just price,
98, 99; and social aspect of
property, 105-107.

Middle Classes, and laissez-faire,
20.

Mitchell, John, on content of a
Living Wage, 130, 131, 138,
139; organization, 294, 295.

Monopoly, and the future of

INDEX

the laborer, l6g, l66; and free '
contract, 242.

Moral Convictions, and the rate
of wages, 4, 5.

Natural rights, 44-66; descrip-
tion of, 44-47; defence of,
48-53; opposing theories, 55-
62; Catholic and Revolution-
ary views of, 62-66; duty of
State to protect, 301.

Need, ordinary, grave, and ex-
treme, 274, 275.

Needs, a canon of distribution,
^^, 78, 249; a measure of
just wages, 112-114; absolute
and conventional, ■12S-127; re-
gular and occasional, 132-135;
spiritual, 135, 136; of the
employer, 250-253.

New Zealand, wage-legislation
of, 38, 39, 315-318.

Old-Age Pensions, and State Ac-
tivity, 321, 322.

Organization, see Laborers.

Overproduction, and the under-
paid, 168-174.

Ownership, see Distribution, Pro-
perty, Right.

Parents, and the wage-rights of
a son, 118, iig.

Personality, and natural rights,
51, 52; and right to subsist-
ence, 70-72; to a decent live-
lihood, 72, 74, 324; to a Liv-
ing Wage, 99, 100, 117, 118,
240.

Political Economy, and ethical
conceptions, 5, 6.

Price, determination of, 190-198;
and distribution, 190-198; and
rent, 203, 204; and profits,
208-210; effect of a universal
Living Wage on, 303-313.

Product, division of the national,
191, 192; of the marginal
laborer, 229-232.

Production, methods of and

rates of interest and wages,
219-221.

Productivity, a canon of distri-
bution, 75-77; and high wages,
182-184; latent, and a univer-
sal Living Wage, 187-189; and
interest, 215, 217; and wages,
227-231, 243-248; 287-289; not
always ascertainable, 244-247;
as a title to wages and in-
terest, 248, 249; 253-258.

Property, rights of, 71, 72, 241,
242; social aspect of, 104-107.

Profits, determination of, 207-
210.

Rae, John, on eight-hour law,
319.

Reason, and the titles of owner-
ship, 241, 242.

Religion, and labor question,
329. 330.

Rent, determination of, 199-206.

Reports of Labor Bureaux, Unit-
ed States Census, and Con-
gressional Commissions, on
size of laborers' families, 121,
132; cost of living, 139-147;
unemployment, 148, 149; num-
ber of underpaid, 154-162;
movement of wages, 162-165;
organization of labor, 293.

Resources, national, and a uni-
versal Living Wage, 182-189;
and interest, 215.

Revolutionary Philosophers, on
natural rights, 62, 63,

Rich, obligations of the, 270-279.

Right, the, to subsistence, 68-72;
property, 71, 72; a decent live-
lihood, 72-80; equality in dis-
tribution, 75-78; a Living
Wage, 81-122.

Rights, of the employer, 251-260;
see Natural Rights.

Right Conduct, criterion of, 48,
49.

Ritchie, D. G., on rights, 60;

344

INDEX

law of nature, 63.

Rogers, J. E. Thorold, on
"Statutes of Laborers," 24-

Roosevelt, President, on race
suicide, 284, 285 ; corporations
and national control, 314.

Saving, effect of excessive, 168-
174; and interest, 215, 258-
260; and wages, 227, 289.

Sexual Self-Restraint, and the
underpaid, 280-287; economic-
ally efficacious, 281, 282;
morally pernicious, 282-287.

Shelter, and the content of a
Living Wage, 134, 135.

Sidgwick, Henry, on ethical
teaching of the economists,
5, 11; basis of rights, 52, 53.

Small, A. W., on content of a
Living Wage, 136.

Smart, W., on freedom of con-
tract, 18; the content of a
Living Wage, 127, 128; ma-
chinery, 166, 167; luxury,
185; abolition of poverty, 188;
effects of a rise in wages,
303. 304; ten-hour day, 320.

Smith, Adam, on industrial
liberty, 12-14.

Social Estimate, the, as a cri-
terion of just price, 88, 89,
98, 99; and of a Living Wage,
94-96, 116.

Social Utility, and natural
rights, 55-62; and the right
to a Living Wage, 82-85, "SJ
and employer's obligation,
IIS, 240, 241.

State, the, and rights, 55-62;
and the wage-paying function,
191, 240; and regulation of
industry, 297-300 ; functions
of, 301, 302; power of to bring
about a universal Living
Wage, 313-323-

Statutes of Laborers, 23-25.

Subsistence, the right to, 68-

72-

Superfluous Goods, description
of, 271-273; duties of pos-
sessor of, 273-279; methods
of distributing, 275-279.

Supply, and price, 192-198; and
interest, 215; and wages, 226,
232.

Taxation, of incomes and ia-
heritances, 322, 323.

Theological Writers, and Living-
Wage doctrine, 97, 98.

Total Abstinence, and wages of
the underpaid, 290, 291.

Underpaid, see Laborers.

Undertaker, his share of the
product, 208-211; importance
of, 246-248; see Employer.

Unemployment, amount of, 148,
149; and machinery, 166-168.

Value, of product relatively to
wages, 231, 232, 243i 244;
see Price.

Vermcersch, A., on a family
Living Wage, 116; content of
a Living Wage, 131.

Victoria, legislation of on wages,
38, 31S-318.

Wage, a Living, economic feasi-
bility of, 302-313; enforce-
ment of by State, 313-319;
effect of on social and in-
dustrial conditions, 328, 329;
wisdom of striving for, 329-
331-

Wage-Fund, 6.

Wage-System, unknown in
Middle Ages, 29; not essen-
tial to human welfare, 68.

Wages, difference between just
and living, 78; economy of
high, 182-184; and interest,
217-221; nature of, 222, 223;
no tendency of to a uniform
level, 223-225; determination

345

INDEX

of, 226, 227, 232, 233; and
productivity, 227-231; com-
pletely just, 326, 327.

Walker, F. A., on resistance by
laborers, 279; benefits of
limitation of offspring, 282.

Webb, Sidney and Beatrice, on
"Statute of Elizabeth," 23;
medieval idea of regulation,
26; a Living Wage, 82, 129;
declining birth-rate, 285; or-

ganization of labor, 291,
292, 294; economic feasibility
of a universal Living Wage,

305-307. 313-
Wife, the, should not be a

wage-earner, 134.
Women, rights of to a Living

Wage, 107, 108.
Zigliara, Cardinal, on a family

Living Wage, iix-114.

346

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